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Ask anyone transacting with cryptocurrency what they enjoy most about it. They’ll probably say it’s volatility. Now ask anyone transacting with cryptocurrency what annoys them most about it. Again, they’ll say it’s volatility. Though it seems so, it is not just a casual remark for an introduction, nor is it an exaggeration. The price of BTC to USD in the morning may not be the same as the price of BTC to USD in the evening. With cryptocurrency, you might be a rich person right now, a wealthy person, but you can be not so rich in a few hours; this happens with most cryptocurrencies and not just BTC to USD. The prices can fluctuate several times within a period. These fluctuations are due to reasons such as but not limited to investor sentiments, market liquidity, market supply, and demand, news and events, lack of regulations, etc.
Cryptocurrencies are highly volatile due to factors contributing to their unique market dynamics. Here are some key reasons why cryptocurrencies tend to be volatile:
Cryptocurrencies have a limited supply, whether established or not, with predetermined issuance mechanisms. BTC, for example, has a max supply of 21 million BTC. Changes in demand can have a significant impact on prices. If there is a surge in buying interest, the demand can quickly outpace the available supply, leading to price increases. Likewise, the cost can drop if there is a sudden increase in selling pressure.
Unlike traditional assets like stocks, cryptocurrency does not have inherent value or generate cash flows. The market, investor sentiment, and perceived utility primarily drive their value. This lack of intrinsic value amplifies price volatility as market and market participants’ perceptions and sentiments change.
The cryptocurrency market is relatively young and less regulated than traditional financial markets; this creates an environment where market manipulation occurs relatively quickly. Individuals or entities with large amounts of cryptocurrency holdings can influence prices by executing large trades, creating artificial demand or supply, and triggering cascading effects on the market.
The regulatory landscape surrounding cryptocurrencies is still taking shape and still evolving. News related to government regulations, potential bans, or restrictions on cryptocurrency use can significantly impact market sentiment and cause price fluctuations. Uncertainty regarding the legal framework and possible regulatory changes can increase volatility.
Cryptocurrencies are built on blockchain technology, introducing technical factors that can influence volatility. Issues such as network congestion, scalability challenges, security vulnerabilities, and software updates can lead to price fluctuations as users and investors react to these developments.
Cryptocurrency markets are highly influenced by investor sentiment and market psychology. Investors can manipulate the market and drive irrational buying or selling behavior, creating exaggerated price movements. Emotional responses to market news or events can lead to herd behavior, where investors follow trends without considering the underlying fundamentals.
Overall, the combination of factors mentioned above contributes to the inherent volatility of cryptocurrencies, making them attractive to some traders and investors seeking opportunities but also carrying increased risk. Due to their volatility, cryptocurrencies can offer significant profit opportunities and have substantial risks. Investors and traders should exercise caution, conduct thorough research, and consider their risk tolerance before engaging in cryptocurrency trading or investment.
A savvy crypto investor utilizes several market research tools before taking risks or considering investing in a crypto endeavor. One such tool is the Crypto Profit Calculator.
A crypto profit calculator is a tool or software that helps you calculate the potential profit or loss from your cryptocurrency investments. It considers the initial investment amount, quantity of coins, purchase price, current price, and transaction fees to determine the profit or loss. For example, after factoring in some elements, the BTC to USD profit calculator can estimate the profit or loss you can make from a mining session.
Crypto profit calculators like the BTC to USD profit calculator can provide valuable insights into your investment performance and help you make informed decisions about your BTC investments. They can calculate profits in different scenarios, including buying and selling at different prices or considering multiple transactions. Even in other currencies, BTC to USD profit calculators usually provide options to calculate in a different currency conversion.
Some crypto profit calculators consider additional factors like taxes, mining rewards, staking rewards, and other fees associated with trading or holding cryptocurrencies.
These calculators can be a standalone online tool or be integrated within cryptocurrency portfolio trackers or additional services offered by cryptocurrency exchange platforms. Crypto profit calculators are valuable tools for estimating potential profits or losses and understanding the impact of various factors on your investment. However, they should be used as a guide and not as a guarantee of actual results since many external factors can affect the accuracy of the result.
They are easy to use, only requiring you to input the relevant information about your investment. Then they calculate the potential profit or loss based on the provided data, leading us to the next section.
A crypto profit calculator takes the relevant inputs the user provides and performs calculations based on those inputs. Here’s a general overview of how a crypto profit calculator typically works:
Input Data: The user provides information such as the initial investment amount, quantity of coins, purchase price, current price, transaction fees, and other relevant details.
Calculation of Initial Investment: The calculator multiplies the number of coins by the purchase price to determine the initial investment amount.
Calculation of Current Value: The calculator multiplies the quantity of the coins by the current price to determine the present value of the investment.
Calculation of Transaction Fees: The calculator considers the transaction with buying and selling the coins. It may require the user to input the specific fee structure for the exchange or apply a default fee percentage. The calculator then calculates the transaction fees based on number of coins and the fee rate.
Calculation of Net Profit: The calculator subtracts the initial investment amount and the transaction fees from the current value to calculate the net profit or loss.
Advanced BTC to USD profit calculator may include additional features such as tax calculations, mining or staking rewards, recurring investments, or the ability to simulate different buying and selling scenarios.
However, note that results provided by the profit calculator can be affected by the same reasons that make crypto volatile, with the exchange platform’s transaction fees being another reason.
Since the market is ever-changing, your best bet as an investor is to choose a reliable platform to get the best out of the BTC to USD profit calculator. They need to be up-to-date about market trends, and their services need to be able to update in real-time in the case of sudden shifts.
PlasBit is one cryptocurrency platform that aims to make your life easier. Their website hosts many cryptocurrency exchange tools and services, which can be accessed on your devices if you have active internet. Their wallet is multi-coin supported, which means you can hold more than one coin in your PlasBit portfolio, this relieves the stress of having to check multiple websites to see your coins, and you can manage and withdraw your coins, converted into fiat with the PlasBit debit card. Refrain from being surprised; PlasBit debit cards work like your usual ones. You can use it at any merchant that accepts debit cards. Your cryptocurrency will be converted into fiat so you can make payments, transact and withdraw cash. That is amazing already, but there’s more; PlasBit transfers. PlasBit platform can make cryptocurrency transfers to over 130 countries worldwide. You should check out their transfers page to learn more about how their transfers work. Then it should also be mentioned that PlasBit has a BTC to USD profit calculator and offers many other tools/widgets you can use on their website or request the link to add to your website. As mentioned, the profit calculator is just one of their many tools. If you check their widgets page, you will find more tools: the price ticker, the coin list, a mining calculator, etc.
Cryptocurrencies are virtual currencies; their worth is determined by the people who own them, and they are unregulated, which means anything can happen anytime. In this article, we have highlighted some things that can impact cryptocurrency prices, the crux of which is still human sentiment. As such, it is advisable to research the market before venturing into any endeavor with your coins. The article also goes through one of the tools needed to do proper research so you don’t take an unnecessary risk and end up on the losing side. Also mentioned in this article is a recommendation of one of the best cryptocurrency platforms you can explore at your own pace; after all, what you experience is better than what you read. In the end, it is still just a recommendation. Users can try out different platforms using the criteria mentioned in this article.
Please be aware that some of the links on this site will direct you to the websites of third parties, some of whom are marketing affiliates and/or business partners of this site and/or its owners, operators and affiliates. We may receive financial compensation from these third parties. Notwithstanding any such relationship, no responsibility is accepted for the conduct of any third party nor the content or functionality of their websites or applications. A hyperlink to or positive reference to or review of a broker or exchange should not be understood to be an endorsement of that broker or exchange’s products or services.
Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.
CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.
Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.
When trading in stocks your capital is at risk.
Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice.
