#Comparing the volatility of stocks and cryptocurrencies

Today we will talk about another way to make money online. Let's figure out how it differs from cryptocurrency and whether it is worth using it in your business.

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Comparing the volatility of stocks and cryptocurrencies

Today we will talk about another way to make money online. Let’s figure out how it differs from cryptocurrency and whether it is worth using it in your business.

What is volatility

Volatility refers to the degree to which the price or yield of a certain asset changes. It can refer both to one security, and to something full-fledged and large. Imagine that you have an average return on an asset, and so volatility is how this price changes for better or worse. There is also such a concept as a “volatility indicator” – this is a financial instrument that helps an investor to qualitatively and clearly evaluate the statistics of price fluctuations for a share for a specific period of time.

What affects volatility? Growth, decline.

Why is she growing? This happens if important events occur that affect it, they include; economic, political, market circumstances. Various sanctions, elections, transfers and innovations in the state directly affect volatility. Also data from the world of macroeconomics, such as data on unemployment, inflation, GDP dynamics and more. You can learn more about financial news in the world on this site.
Another reason for the change in volatility can be financial reports, reviews, various rumors and news. For example, mobile phone stocks may fall because companies recall phones due to a malfunction in their operation (due to defects, frequent breakdowns, etc.).
Big businessmen, famous people. As a rule, they are considered opinion leaders, they are listened to, imitated, someone wants to be like them. This may not play into their hands. Loud statements can lead to a rise or fall in the course. Someone can even afford to manipulate the whole market and get a big benefit from it. Although such manipulations are not legal, they are, in fact, difficult to prove. Usually, the perpetrators are fined and banned from trading on the exchanges.

What is the right way to respond to it?

It happens that you just get lost when something does not go according to plan. At what it can happen both for an experienced investor and for a beginner. Here are a few rules that can help you deal with anxiety about risks in this area:
Less excitement. We are psychologically arranged in such a way that you should bring yourself almost to a panic. You need to understand that there is instability everywhere and this is normal.
Keep investing. Do not rely on extreme indicators and buy when they appear. Continue your business even after the trend has changed.
Be patient. Everything doesn’t come right away. You need a plan by which you will move forward to success and achieve it. There are things that are out of your control, do not waste your nerves on them. Be patient and you’ll know it will become easier for you to do it. You know, sometimes you should allow yourself to let something, as they say, “according to its own course.” the main thing is not to overdo it.
Check your balance less often. Having bought stocks or cryptocurrencies, you should not follow their movement every five minutes. It’s too much.

What is the difference between the volatility of cryptocurrencies and stocks?

Quotation. For electronic assets, it is several times higher than for stocks. Why is that? Because the quotation of the same bitcoin depends on its demand for service as an electronic currency (both for the “black” and the regular market; as well as on how much investors and speculators believe in it. In the issue of shares, things are different: they the price also depends on the demand in the supply, but also on the free-float coefficient, which is perpendicular to the stock price itself (you can say it depends on it); on the volume of this stock, as well as on external factors that we discussed with you above.

Main differences

If you buy cryptocurrencies, you are identified as its sole owner, while a shareholder can claim a share of the company if we buy its shares.
Cryptocurrencies will be more “accustomed to” sharp increases in a large percentage. Inverters usually tend to choose the “more money in a short time” option. Just like other ordinary people. But on the other hand, the higher the potential for such earnings, the greater the risks.
In stocks The severity of stock markets is much higher, it is regulated by law. In the case of cryptocurrency, everything is more accessible and easier. You can learn more about cryptocurrency on ICOholder. The minimum deposit here is just a dollar.
The dependence of Ethereum and Bitcoin on securities is quite low. In the case of bonds and stocks, there is a dependence on the performance of certain companies and sectors.
Cryptocurrency is suitable for those people who want to insure their portfolio from things that negatively affect the financial market.

Is buying cryptocurrency like buying stocks?

Of course yes. All because they behave in a similar way. Although the fundamental analysis of stocks differs from the analysis of tokens, they have a trading mechanism and a common technical component. By the way, cryptocurrency dispute trading is very similar to intraday stock trading. They have a common strategy / short term. The only difference is that the cryptocurrency markets never close.

Conclusion

Choose what suits you the most. It all depends on whether you rely on a long-term basis, or how much stay for short periods. We advise you to pay attention to the above nuances and take them into account when choosing. You can also study additional literature, reviews of people who work in this. Develop, it’s important. Read various news, be interested, watch videos, take courses. Only understanding something, understanding how it works, you can achieve good results. It is also worth considering the amount you are counting on, add to this an understanding of your skills and experience that you are ready to invest in your business.

We hope you found this article helpful. Good luck with your plans!

by Lewis Anderton

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