Why Crypto is so Volatile? | Can we buy crypto at 0 market price? #crypto #cryptocurrency #bitcoin - YouTube

Hello Everyone, this is Priyanshu and you are watching LearnFintech

In this video, we will see why crypto currency is so volatile

and why there is so much fluctuation in price

We will also see that can we purchase crypto currency at zero market price

so let's start the video

Friends we all know that there is high volatility in the crypto market so lets discuss some of its reasons

First: 24/7 globally open market

Friends cryptocurrency market is open 24/7 globally

because of which we can buy or sell cryptocurrency at any time

and the biggest impact of this is that the crypto market is never closed

and since the market never closes so the price cannot be stable which increases the volatility

Second: Crypto is independent

Friends this is major factor in crypto volatility

Since Crypto is Independent and is not associated with anything so it is very difficult to predict its price

What happens is that whenever we talk about stocks we predict it on the basis of company's performance

when we talk about currency associated with any country we predict it on basis of country's performance

but crypto is not associated with anything which creates a big impact that crypto is independent

which in turn increases its volatility

Third: Lack of Information

Friends like I told you in last point that crypto is not associated with anything

so there is no genuine prediction or news regarding crypto

and when people don't have information then they follow news that creates Herd Mentality

and people invest because of fear of missing and losing

what happens is that when some good news comes investors invest increasing the volatility on the upside

and when there is bad news people divest in turn the volatility increases on the downside

since there is no genuine information so investors rely only on these things for their investment

Fourth: Investing Environment

Friends from the starting of development of crypto the environment was created like crypto is very volatile

which increases the fear of volatility inside investors

Investors think that crypto can go 40-50% up as well as down in one day which is true also

so when this kind of mentality develops in society

Investors invest when market get bullish which pumps the market

and because of which 40 50 % or more than that upside occurs

and when they see that market is bearish they divest their money which leads to downfall due to huge sells

and these big buy and sell orders increases the volatility in market

guys sometimes the market price of some coins touches 0

so some investors usually think that can we buy these coins at that time

so the answer is no lets see why this happens

First of all friends we should understand that whenever we put some buy order in market

so we do need some sellers who sell there coin so that we can purchase them

but in this case when our market price is $0

so why will anyone sell when he knows that he will not get any value of his coins

even he has to pay selling transaction fees from his pocket

so what happens is that when price reaches $0 then no one sells their coin

and due to herd mentality, huge buy orders are placed

which automatically increases the demand

and since there is high demand and no supply then coin price will automatically revive

if you want to know demand-supply model in detail then you can checkout this video, link is in description

and due to this reason friends, we cannot purchase any coin at $0 market price

even practically market price never reaches 0 it is 0.0000.... something

but if it reaches $0 then it will revive on this concept of demand-supply

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Thanks a lot guys for watching this video. I will see you guys in next video till then Stay Safe Stay Happy