Hello Binancians 💜

Let's discuss about, #Altcoin101

Why are altcoins so volatile and move so quickly?

_ We can break down the high volatility into three main concepts:

👉 Size, Speculation, and Liquidity.

1. 🤏 Size and Market Cap (The "Small Boat" Effect)

_ The biggest reason for the extreme movements comes down to size, specifically Market Capitalization.

2. 🎣 Low Liquidity (The "Hard to Sell" Problem)

_ Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. Altcoins often suffer from low liquidity.

3. 🚀 Speculation and Hype (The "FOMO" Engine)

_ Unlike traditional stocks that rely on decades of financial performance, many altcoins are bought based on speculation about future potential or just pure hype.

In short notes, altcoins are like those speedboats because their small size and low trading volume mean they need very little energy (money) to change direction quickly, and speculation is the powerful engine driving them forward (and sometimes backward) at high speed.

Share what you think about this post and your idea of this topic!

Have a Great Day All 🍀