Cryptocurrencies are connected with volatility since they frequently experience dramatic upward and negative movement. However, a lot of people choose a high-risk approach in the hopes of making more money by trading the most volatile cryptocurrencies.
The volatility problem still plagues this budding business, despite cryptocurrencies’ tremendous growth and history. Bitcoin continues to be the most volatile cryptocurrency, with prices that change every time you wake up.
In this article, we’ll dive into the question: What Is The Most Volatile Cryptocurrency? The top 5 most volatile cryptocurrencies are listed below, along with tips on how traders and investors can profit from the volatility.
Does Volatility affect Day Traders?
Market volatility is advantageous.
Volatility provides the long-term risk required to provide investors with significant stock market returns. No risk, no profit, as they say. In the short-term, volatility may frighten some market participants thanks to scary headlines and prophecies of doom.
However, day traders can cut the exaggeration. If you trade every day, volatility shouldn’t be feared; it should be welcomed!
Regardless of the present trend, volatile equities offer significantly more opportunities for lucrative trades than flat ones.
But for day traders utilizing technical analysis, volatility isn’t only a friend. It’s a dependable ally that you hope never wanders off too far.
Examining the Most Volatile Cryptocurrencies in Detail
When investing in the most volatile and unpredictable cryptocurrencies, investors should be ready for regular price fluctuations.
Let’s explore the 12 most volatile digital assets to invest in for 2022 to have a deeper understanding of the top assets in this market.
#1. Ethereum: A Volatile Altcoin Expected to Decrease by 60% by 2022
With a market cap of more than $210 billion, Ethereum (ETH) is the biggest alternative currency. Nevertheless, the token will be a risky investment in 2022 due to the persistently unstable global economic conditions.
ETH is currently trading at $1,740 in September 2022 after attaining an ATH of $4,900 in November 2021. With the planned ETH 2.0 upgrade, which is anticipated to improve the network’s scalability and reduce the gas fees, such a price drop might, nonetheless, attract additional investors.
Ethereum may rank among the most volatile assets to invest in with the deployment of this network upgrade, known as “The Merge,” anticipated before the end of 2022.
Ethereum has offered a return on investment (ROI) of more than 61,000% since its debut, despite the unpredictable price swings.
#2. Bitcoin: The most popular cryptocurrency to invest in
Bitcoin has been one of the most unpredictable cryptocurrencies to invest in, despite being the first and biggest cryptocurrency in the market.
This token’s extraordinary growth from less than $1 in 2009 to around $70K in 2021 would have benefited patient investors. But every year, BTC has significant price adjustments.
For instance, Bitcoin experienced a bear market for several years after breaking the $20,000 barrier for the first time in 2017. Only in 2020 did the currency surpass $20K once more, kicking off a 12-month bull run that saw the coin hit $60K.
Bitcoin has corrected down to the $20K levels after another bull run that saw the popular digital asset hit an ATH of $69,000 in November 2021.
Bitcoin, which has a $433 billion market cap and is now priced at $21,888, is still the most valuable cryptocurrency. According to certain Bitcoin price forecasts, BTC might surpass $65,000 by 2025 if difficulties with mass adoption and energy consumption are resolved.
#3. Lucky Block: A volatile cryptocurrency and NFT platform
Investors can take part in weekly drawings and competitions on the NFT-based platform known as Lucky Block. Lucky Block’s governance token, LBLOCK, is used by the platform to oversee transactions and settle incentives.
LBLOCK just introduced a new token version (V2), an ERC-20 token that is simpler to list on controlled exchanges (CEXs). Investors benefit from the V2 cryptocurrency since it has no transaction costs. Conversely, the V1 coin uses the BEP-20 protocol and charges a 12% transaction fee.
On two of the biggest centralized exchanges in the industry, MEXC and Gate.io, the V2 coin has been listed. The price per token for LBLOCK (V2) is $0.0007.
#4. Decentraland(MANA): High-Risk Metaverse Crypto Coin
The Ethereum blockchain powers Decentraland, a marketplace for virtual real estate that offers members purchase, sell, and trading possibilities. The primary item that can be traded on Decentraland is LAND, an ERC-721 token that stands in for a virtual plot of land.
MANA, an ERC-20 token that serves as Decentraland’s native cryptocurrency, may be used to buy LAND on the network. The platform also included a third NFT coin called Estate, an ERC-721 that symbolizes combined LAND parcels.
MANA, which debuted in 2017 for $0.025, rose to an all-time high (ATH) of $5.90 before the end of 2021. Decentraland has grown to be one of the major cryptos based in the metaverse, and the coin has garnered a lot of volatility in 2022.
#5. Solana: Open-Sourced Platform with Fast Transaction Speed
Since Solana (SOL) is a well-known open-sourced blockchain, all transaction data are kept public and all investors have access to transparency.
Solana can list several decentralized finance (DeFi) protocols, dApps (decentralized applications), and NFTs by putting smart contracts on the network.
Investors are looking for alternatives because of the high transaction prices and slow performance, even if Ethereum is the largest blockchain in terms of smart contracts and protocols published. Compared to Ethereum’s average transaction rate of just 17, Solana can process up to 65,000 transactions per second.
Which cryptocurrency is most promising?
Bitcoin still has a lot of promise as of right now. Since the Bitcoin price was halved, the coin’s supply has been steadily declining as demand has skyrocketed. In my personal opinion, Bitcoin seems like a fantastic asset to invest in with wild estimates that the coin’s price would reach $100,000 by the end of 2022.
Nevertheless, there are many other cryptocurrencies with enormous potential. The value of Uniswap is rising significantly as the DeFi campaign gains momentum. In February 2021, the value of the governance token, UNI, skyrocketed.
Finding the Most Volatile Cryptocurrencies: A Guide
After knowing the list of the most volatile cryptos out there, how do we determine ourselves if a crypto’s volatile or not? Here are a few strategies for traders who want to buy and sell volatile assets in order to generate short-term profits:
Follow cryptocurrency pre-sales and initial coin offerings
Due to the regular levels of volatility that digital coins may experience, investing in cryptocurrency initial coin offerings (ICOs) is a high-risk, high-reward endeavor.
High volatility in the short term can eventually result in significant price increases in the long run if traders find newly released assets on the market.
Consider the Historical Price
When searching for volatility, investors might attempt to analyze the historical price development of digital assets. One such cryptocurrency that offers significant price corrections after highs is Bitcoin. However, both bull and bear markets last a very long time.
In contrast, new currencies like Shiba Inu might offer more frequent volatility, which day traders might attempt to exploit. The simplest way to comprehend the future volatility levels to anticipate is to study an asset’s graph.
Conclusion: Do Volatile Cryptocurrencies Make Good Investments?
For investors that entered the market at the proper timing, cryptocurrencies have proven to be rewarding investments. A strong, diversified portfolio has the potential to be a good investment, even with volatile investments.
For instance, many new and small-cap cryptocurrencies have the potential to see rapid growth. Trading volatile assets offer high-risk investors or day traders the chance to generate modest but consistent gains if they are able to identify potentially profitable trends.
As a day trader, volatile coins can be one of the finest investment classes for rapid growth because we largely rely on technical analysis, market movement, and different graphing patterns in order to take profit.
However, while dealing with cryptocurrencies, it’s crucial to only invest what you can afford to lose. Investors shouldn’t invest 100% of their allotted funds in a single trade or investment due to the volatile nature of these assets.
Wrapping It Up!
So there you have it, the answer to our question: What Is The Most Volatile Cryptocurrency! Any financial market needs volatility to function properly. Without it, growth would not be possible due to the slow pace of the needed returns. However, it’s crucial to evaluate the risk-return tradeoff before investing in cryptocurrencies.
Any questions? Feel free to comment down below.
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