Coinbase: unlike bitcoin, there are two sides to volatile volumes Premium content Save
There are several reasons why investors find this cryptocurrency appealing, and the chief of that is its affordable price. However, this coin has also shown that its value can rise well enough over the years, and it still has plenty of room for growth.
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But to understand the dynamic that led to this year’s depressing year for crypto, we actually should start a few years before 2018. In bitcoin’s early days, Mt. Gox was the go-to service for handling transactions. Then, in 2014, it halted transactions and slowly copped to a crypto-hack to the tune of $473 million, the biggest hack of its kind at the time, and it gave many people pause. But it was still early enough for people to believe that the blockchain system was still getting all the technical kinks out.
They allow users to store cryptocurrencies, make online or in-store purchases, and track their finances.
Danial says there have been plenty of huge spikes followed by pullbacks in Bitcoin’s price since 2011. “What I expect from Bitcoin is volatility short-term and growth long-term.”
At IG, our markets for bitcoin, bitcoin cash, ether and litecoin are quoted against the US dollar. This is how you’ll usually see these cryptocurrencies quoted elsewhere, too.
On the other hand, Binance.US only has U.S. customers. The size of its liquidity pool is limited to the number of U.S.-based traders. However, operating in one of the largest crypto markets in the world, Binance.US still has a large enough liquidity pool to satisfy the needs of any small-scale trader. In April 2021, the trading volume on Binance.US was more than $28 billion. Binance.US has a much smaller liquidity pool than Binance, but it is enough for all but the very largest traders.
Last Tuesday, Squid was trading at just 1 cent. In less than a week its price had jumped to over $2,856.
Take Bitcoin for example, if you want to get Bitcoin on Binance.US, here’s how you would do it to make sure you only pay that 0.1% fee, and not the 0.5% fee:
BUSINESS & INNOVATION763Personal Finance643GLOBAL ECONOMY521FINANCE & BANKING511Entrepreneurs & SMEs439EMERGING TRENDS335
Of course, crypto is notoriously volatile. The last time Bitcoin reached these levels, it fell back several thousand dollars, and it’s undergone multiple corrections that take it down by half or more. Other coins are even more volatile – the memecoins bounce back and forth wildly at times – and scams and hacks occur with some frequency.
Barberis, N., A. Shleifer, and R. Vishny (1998), “A model of investor sentiment”, Journal of Financial Economics 49, 307{343.
Recently, such platforms have come under increased scrutiny by lawmakers and regulators. Binance in particular is reportedly under review by regulators in the U.S., Britain, Germany, Japan, Hong Kong and elsewhere.
The little more than a decade old market for digital assets has already roughly quadrupled from its 2020 year-end value, as investors have gotten more comfortable with established tokens such as Bitcoin and networks like Ethereum and Solana continue to upgrade and attract new functionality. Excitement about the possibilities of decentralized finance and non-fungible tokens is growing, and memecoins like Dogecoin and Shiba Inu continue to attract attention.