The crypto market has been a rollercoaster ride of volatility over the past few years, with wild price swings in the most volatile cryptocurrencies leading to a risky investment landscape ripe with golden opportunities. 2023 has been no different, with liquidity concerns and Federal Reserve rate hikes generating considerable anxiety, and thus volatility, in the cryptocurrency market.
For investors looking to capitalize on the ever-shifting landscape and maximize returns—be it by searching for either the safest, least volatile coins or taking big risky swings at the most volatile cryptos—it’s important to a) understand your own personal risk tolerance and b) thoroughly research every cryptocurrency under consideration to determine whether the risk outweighs the profit opportunity.
THE 3 LEAST VOLATILE CRYPTOCURRENCIES
- Bitcoin – The most popular crypto in the market, Bitcoin represents 40% of the crypto market cap and has an established track record of bouncing back from previous market collapses.
- Ethereum – The premier Layer 1 blockchain network, Ethereum has a tremendously diversified ecosystem that includes everything from NFTs to DeFi, providing investors an opportunity to minimize some of the market’s systemic risk.
- Tether – One of the oldest stablecoins, Tether is not only reliably stable, comparatively speaking, but it’s also the fourth most valuable cryptocurrency by market capitalization.
The 3 Most Volatile Cryptocurrencies
- Love Hate Inu – A new meme token for high-risk investors in the Vote-to-Earn space.
- Fight Out – A volatile Move-to-Earn project designed to reward users through a fitness app and their own Soulbound NFT avatars.
- Dogecoin – The Elon Musk-endorsed meme coin, DOGE, has reliably been among the most volatile cryptocurrencies for several years running.
What Makes a Cryptocurrency Volatile?
- Lack of Regulation – Uncertain or changing regulations lead to volatility from market participants.
- Market Manipulation – Due to its relatively small size, large investors can swing the market with significant transactions.
- Speculation and Sentiment – Speculative or sentimental investors looking to profit off short-term perceptions or expectations can cause wild price swings.
- Lack of Intrinsic Value – Without underlying assets to support prices, most crypto is subject to pure supply and demand dynamics.
- Market Fragmentation – A highly fragmented market can lead to exploitable price discrepancies and exacerbate volatility.
- Low Market Depth – The small pool of buyers and sellers makes it easier for large trades to significantly swing the market.
Get Familiar With the Crypto Volatility Index (CVI)
The Cryptocurrency Volatility Index (CVI) is designed to track volatility in the overall crypto market, providing a numerical value that represents the projected 30-day volatility in the market. This allows investors to make crypto volatility comparisons and assess the level of risk associated with the various cryptocurrencies. Other helpful sources for tracking crypto volatility include financial websites, trading platforms, and specialized cryptocurrency data providers.
Whether you’re searching for the least volatile cryptocurrency on the market or you’re more inclined to rely on the most volatile cryptocurrencies, it’s important that you’re relying on trusted sources to deliver the accurate and up-to-date info that you’ll need to fully capitalize on the inherent volatility of the crypto market.
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