Reason Why The Crypto Market Is Down (Part 6)

in #steemit • 5 years ago

#6. Risk diversification isn’t yet possible.

maxresdefault.jpg

When confronted with viable manipulation and market volatility, buyers commonly diversify their assets. Theoretically, this should imply investing in Bitcoin (BTC), Ethereum (ETH) and higher threat ICOs or altcoins.

But in the crypto market, diversification doesn’t work the way investors favor it to. More than 50 percent of the cryptocurrency market cap is Bitcoin alone. This is because most buying and selling happens between BTC and altcoins considering the fact that you can't convert fiat, which means government-backed forex like the USD, immediately into most cryptocurrencies.

So when Bitcoin’s price falters, buyers have a tendency to convert their cryptocurrencies into stablecoins or fiat, triggering a large-scale market decline. In different words, chance diversification doesn’t work in crypto yet.

#mgsc #cryptocurrency #cryptomarkectisdown #whycryptoisdown
5 years ago in #steemit by
$0.00
    10 votes
    Reply 1
    Sort:  
  • Trending
    • [-]
     5 years ago 

    Congratulations @nritwik! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :

    You received more than 100 upvotes. Your next target is to reach 250 upvotes.

    You can view your badges on your Steem Board and compare to others on the Steem Ranking
    If you no longer want to receive notifications, reply to this comment with the word STOP

    Vote for @Steemitboard as a witness to get one more award and increased upvotes!
    $0.00
      Reply

      Coin Marketplace

      STEEM 0.22
      TRX 0.24
      JST 0.038
      BTC 95076.63
      ETH 3277.51
      USDT 1.00
      SBD 3.26