The Firework token has unveiled the world’s first report to measure the relative potential for volatility in trading the top cryptocurrencies.
“The Crypto Volatility Report: September 2021”.
“The Crypto Volatility Report: September 2021″ tracks the perceived relative volatility of major cryptocurrencies. Some currencies appear to be relatively stable, while others appear to be potentially more volatile by an order of magnitude, analyzing their liquidity and price movements over time.
Among the currencies with the lowest volatility potential are Yearn.finance, Bitcoin and Ethereum, with logarithmic volatility scores of 0.98, 1.09 and 1.83 respectively. While those with the highest volatility potential include TrueUSD, with a score of 8.25.
The ranking
The ten least volatile are:
- yearn.finance,
- Bitcoin,
- Ethereum,
- Bitcoin Cash,
- Litecoin,
- Compound,
- Dash,
- Kusama,
- Ethereum Classic,
- Monero.
The ten most volatile were:
- cDAI,
- cUSDC,
- TrueUSD,
- LEO Token,
- Zilliqa,
- NEXO,
- BitTorrent,
- USD Coin,
- Ravencoin,
- Algorand.
The analysis of cryptocurrency volatility
The analysis considered two sets of factors for each currency.
The first is that of price fluctuations over three-time intervals, namely 24 hours, one month and 52 weeks.
The second factor is the structural volatility potential of each currency, including trading volume and currency units in circulation.
A total of 58 cryptocurrencies were considered. Those with relatively small trading volume and circulation were found to be more vulnerable to large swings in value in response to market pressures.
For example, currencies such as Bitcoin, which have massive trading volumes and a large number of units in circulation, can better absorb changes in market pressure that can affect prices.
For this reason, those that have shown less potential for price volatility include Bitcoin, Ether, Bitcoin Cash and Litecoin.
On the other hand, tokens with limited trading volumes, or relatively few units in circulation in the markets, such as cDAI, cUSDC, TrueUSD, inevitably have a greater potential to see their value change very, very quickly.
Firework Token CEO Paul Gallini commented:
“It’s not exactly big news that crypto currencies tend to be volatile. What is far less obvious, even to experienced observers of the crypto market, is just how potentially volatile certain currencies can be. In reality, the day-to-day price swings only tell a fraction of the story. This report is intended to reveal the potential for volatility for the currencies—a factor that any crypto investor needs to keep in mind if he or she wants to gain any investment advantage over time or put currencies to use for commercial purposes”.
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