You’ll lose your crypto investment if you don’t know about volatility in crypto. And not only you but most individuals who don’t know about the future potential or volatility rate of cryptocurrencies.
If there’s one investment that can make anyone rich or poor, it will be the investment of the most volatile crypto. It is best because if you invest in the right coin, you can earn a lot of profit. Otherwise, be ready to see the horrible scenario of why crypto is known as the most volatile investment.
So, if you don’t want to end up with zero, read this article and find out why crypto is a volatile investment? And which cryptos are most volatile?
What Is Cryptocurrency?
Let’s start with the primary or most basic question: What is cryptocurrency? Cryptocurrency is the form of digital currency, which means the currency that exists in a virtual world, not in the real world.
The main differences between virtual and real currency are we can’t hold crypto physically, but we can save it in the virtual wallet. While the case is the exact opposite in terms of real currency as we can hold it and save it in banks.
Another main difference is there’s no role of government or banks in cryptocurrency. Nor government, bank, or any type of organization can interrupt transactions.
What Is Volatility?
The primary definition of volatility is a liability to change rapidly and unpredictably, especially worse. That’s the exact meaning of crypto volatility. It signifies the price of crypto assets over a period.
Crypto is known as a volatile investment because no one can guarantee you that their prediction about the price will be true. Yes, the price can go way too high, but it can also decrease. Like Bitcoin, the price at the start of 2021 was around $69,000, and at the end of the year, it was around $47,000.
Crypto volatility is the difference between the price that can change unpredictably from up to down in a few days.
Pros and Cons of Crypto Volatility
Everything has its pros and cons; we can’t label any object that a specific thing only has negative impacts. The same goes for cryptocurrency; it is still the best way to invest even though it is volatile.
Below we’ll share both things, the pros and cons of volatility. So you can see the big picture and make a good decision.
Pros
Eliminate Third-Party Interference
In our world, almost all currencies are regulated by governments, controlling the exchange rate and other things directly or indirectly. Other than that, the government can control the transactions and keep records of every detail.
That’s not the case with crypto; it eliminates the interference of any third party. It also means the govt can’t control your assets or anything related to it.
Supply and Demand
The central bank of all countries can produce paper money when they need it. There’s a law of supply and demand. If there’s something rare, the demand will automatically go high.
This is the case with cryptocurrencies; each currency has set the limits of the coins that can be mined. For example, bitcoin has a limit of 21 million, and now it has surpassed 18 million, and after reaching the limit of 21 million, no one can mine Bitcoin.
In short, the demand for a specific coin can go high in the future because it will become rare due to zero supply. So even though crypto is volatile, there’s a high chance of growth rate in the future because no government or bank can produce crypto to stabilize the country.
Knowledge Is The Key To Success
There’s a big benefit of crypto volatility: no one can predict anything with a guarantee in the future. While in the paper currency, the “govt insiders or high profile individuals” can predict what will happen because of their knowledge or connections.
The benefit is whether you’re a beginner or an expert, you both have to face the same problems. The price of crypto is volatile for you and all crypto assets owners. One thing that can save investment is knowledge and strategy. The more you understand a coin, the safer you are.
Cons
Volatile Investment
Crypto is still the most volatile investment, no matter how beneficial it is. You can’t predict what will happen to your investment in the future. That’s the reason almost all crypto experts suggest investing a small amount of money at first.
Moreover, putting all eggs in one basket is also a mistake that many beginners make, and as a result, they face the worst consequences.
Factors Affecting Crypto Volatility
If you’re wondering why your investment is at risk and what are the factors that are affecting crypto volatility, then here’s a brief guide for you.
Infant Market
The first factor that is the reason for crypto volatility is an infant market. It was started in 2009, only twelve years ago. Even though it is famous and provides good opportunities for investors, it is still an emerging market and needs regulations.
Many individuals own a big part of crypto coins. They can crash the market and influence the price for their benefit.
Unregulated markets
Crypto is undoubtedly famous nowadays due to the high coverage of media and social media, but it is an unregulated market because crypto is new. However, the popularity and ease of access make it a profitable opportunity.
Anyone can purchase their crypto coin and earn from it. Sometimes people see videos and invest in them because they think it is a shortcut to success. After a while, they withdraw from it because they don’t earn from it. The reason is investing in cryptocurrency can’t make anyone a millionaire in one night.
The process of investing and withdrawing after a while also affects the price of cryptocurrencies.
Speculation
The cryptocurrency market is based on speculations. People or, in other words, experts predict the coin value; sometimes their prediction comes true, or sometimes not. These speculations can cause a sudden flow of money that can also affect the crypto price.
That’s why research about the coin is necessary. Believing another person’s prediction is a Himalayan blunder, whether it is an expert or anyone for investment.
Most Volatile Crypto: Detailed List
Remember that this article’s purpose is not that the cryptocurrencies we’re mentioning below are risky for investment. The purpose is to show you which cryptocurrency is most volatile among all and the journey of these coins in the last year. So, you can make your decision after considering all risks and benefits.
Ethereum (ETH)
You certainly know about the Ethereum coin (ETH) if you understand cryptocurrency. It is one of the most famous crypto coins and the second largest after Bitcoin. Ethereum started in 2015 at a $0.31 price.
Ethereum hit the mark in 2021 and outperformed many cryptocurrencies; the value also went high up to $4,818 in November 2021. However, later on, it went down to $3,083 on 10th January 2022.
Stellar (XLM)
Stellar network and Stellar Lumens (XLM) crypto began in 2014. It started as a platform that can provide fast and cost-effective payment or asset transfer solutions to the world. It now comes in the category of famous cryptocurrencies and volatile crypto.
The reason behind it lies in its price, which went high and hit the mark of $0.8962 in 2018. After that, it went down in 2019, and 2020 and again went high in 2021 with the price of $0.7143.
Bitcoin (BTC)
Bitcoin is known as an expensive crypto coin with $41934. It started in 2009, and the coin value was lower than $1. After a while, in 2011, it reached $1. Since then, Bitcoin has been beating all cryptocurrencies.
Still, it doesn’t mean that it is secure; bitcoin is also a volatile coin. The price of Bitcoin was extremely volatile in 2021. The start of 2021 was good, and the price hit an all-time high of more than $65,0000. After that, there was also a set of downwards. The price went down two times in 2021, first after April and second in November.
Litecoin (LTC)
Litecoin or LTC is another famous cryptocurrency that started in late 2011. Similar to the cryptocurrencies we’ve mentioned above, it is also the most volatile crypto. The price of LTC reached the record-breaking mark of US$412 in May 2021.
After that, it went down, and since then, the coin price has been going like a roller coaster ride sometimes; it goes up or sometimes down. However, it is growing, so investors are still considering LTC appropriate for investment.
Ripple (XRP)
Ripple or XRP started in 2012 and provided an inexpensive, faster payment solution worldwide. It is an extremely volatile cryptocurrency as the price swings quite often.
After 2012, Ripple’s price went all-time high in 2018 at $3.04.Later on, there was a set of downwards in price, but then, it remained stable, and again it went high in 2021, now the price is in a slight downtrend.
Bitcoin Gold (BTG)
Bitcoin Gold (BTG) was launched in 2017. It’s an open-source cryptocurrency made to secure the network with the reformation of the mining process. The start of Bitcoin Gold was good, around more than $300 per coin.
Afterward, the price went down in 2018, and since then, it has never gone as high as $300. Between 2019 to 2020, the price remained under $10. However, in 2021 it again showed a good start, hit the mark of $140 in June, then again went down, and the price is $36.
Bitcoin Cash (BCH)
Bitcoin cash (BCH) is a fork of Bitcoin that started in August 2017. The start of BCH was quite good, and after a year in 2018, the coin price went all-time high, around more than $2500.
However, after a few months, the price decreased, and it remained almost the same, with a slight difference between 2019 and 2020. But 2021 had proved to be a good year as the BCH price went high again above $1500 after a long time.
Dash
Dash is a famous altcoin that started in 2014 at $1.the value of coins between 2014 and 2016 remained under $15. And from 2017, it began to grow, and the price went above $1000, then again decreased and showed an increase in 2021.
At the start of 2021, the price of DASH increased by more than $200. In May 2021, it again went high and hit $370. Later on, the price decreased, and as of now, it is $136.
Solana (SOL)
Solana, also known as SOL, was created by San Francisco-based Solana Labs to power up decentralized applications. SOL started in 2020 at a $0.77 price. It is now one of the most famous cryptocurrencies in the world.
2021 has proven suitable for Solana as this crypto is enjoying high growth. At the start of 2021, the price of Solana was $3. But at the end of the year, the price increased faster and went to $258. After that, the price decreased, but the currency grew and attracted many investors.
Dogecoin (DOGE)
Dogecoin (DOGE) is the last pick on our most volatile cryptocurrencies list. It was started in 2013. Similar to Solana, 2021 was also good for Dogecoin.
Till 2020, the coin value was not even $1, and in July 2021, it increased up to $0.6848. After the increase, the price went down, but it is still stable, and the growth rate is also high. No doubt, the currency will become more successful in the future.
Frequently Asked Questions (FAQs)
Which crypto coin has the most potential?
There’s not any specific cryptocurrency that can guarantee success. But yes, many currencies have the best growth potential. Like Bitcoin, which is the first and considered the most beneficial crypto, Ethereum, Binance, and Tether are some growing cryptocurrencies with the most potential.
Is cryptocurrency highly volatile?
Yes, cryptocurrency is highly volatile; you can’t predict the future price of any coin. Sometimes you get a high profit, and sometimes you can lose, depending on the currency. It is better to consider the risk and benefits and conduct proper research before investing in any coin.
Which crypto fluctuates most?
No, crypto does not fluctuate. All cryptocurrencies are volatile, whether Bitcoin, Ethereum, Solana, Polygon, or any other. But if you’re searching for the most unstable crypto, here are the top ten cryptos that fluctuate most:
- Ethereum
- Stellar
- Bitcoin
- Litecoin
- Ripple
- Bitcoin Gold
- Bitcoin Cash
- Polygon
- Solana
- DASH
Is Ethereum volatile?
Yes, Ethereum is volatile, and its price goes high and down after some time like any other cryptocurrency. However, it doesn’t mean it is not good for investment because it is one of the best cryptocurrencies.
Conclusion: Most Volatile Crypto
Cryptocurrency is the future; it provides many features and investment opportunities. Despite being beneficial, it also has cons, and the biggest one is it’s a volatile investment.
That’s why it is crucial to understand the whole topic of volatility in crypto. Otherwise, you may lose your investment that no one wants.
That’s all; please share your thoughts about the article on the most volatile crypto. And if you’ve any questions, write them below in the comment section, don’t worry, we’ll answer you as soon as possible.
