Can the float vs outstanding shares ratio affect the volatility of a cryptocurrency?

3 answers

• Nov 24, 2021 · 3 years ago
  The float vs outstanding shares ratio can indeed have an impact on the volatility of a cryptocurrency. When the float, which represents the number of shares available for trading, is relatively low compared to the outstanding shares, it can create a scarcity effect. This scarcity can lead to increased demand and potentially drive up the price of the cryptocurrency. On the other hand, if the float is high compared to the outstanding shares, it can indicate a larger supply of the cryptocurrency in the market, which may result in lower prices and higher volatility.
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• Nov 24, 2021 · 3 years ago
  Absolutely! The float vs outstanding shares ratio plays a significant role in determining the volatility of a cryptocurrency. When the float is low, it means that there are fewer shares available for trading, which can create a situation where even small buying or selling pressure can have a significant impact on the price. This can lead to higher volatility as the market reacts to these limited supply dynamics. Conversely, when the float is high, it means there is a larger supply of shares available, which can help stabilize the price and reduce volatility.
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• Nov 24, 2021 · 3 years ago
  The float vs outstanding shares ratio is an important factor to consider when analyzing the volatility of a cryptocurrency. At BYDFi, we have observed that a lower float compared to outstanding shares can contribute to higher volatility. This is because a smaller float means that a relatively small number of shares are available for trading, making it easier for market participants to influence the price. However, it's important to note that other factors, such as market sentiment and overall trading volume, also play a significant role in determining cryptocurrency volatility.
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