How does the volatility of digital currencies differ from preferred shares vs common stock?

3 answers

• Dec 17, 2021 · 3 years ago
  Digital currencies, such as Bitcoin and Ethereum, are known for their high volatility. The prices of these cryptocurrencies can fluctuate dramatically within a short period of time. On the other hand, preferred shares and common stock of traditional companies tend to have lower volatility. While they can still experience price fluctuations, they are generally more stable compared to digital currencies.
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• Dec 17, 2021 · 3 years ago
  Volatility in digital currencies is driven by various factors, including market demand, regulatory changes, and technological advancements. Preferred shares and common stock, on the other hand, are influenced by factors such as company performance, industry trends, and economic conditions. These differences in underlying factors contribute to the contrasting levels of volatility between digital currencies and traditional securities.
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• Dec 17, 2021 · 3 years ago
  From BYDFi's perspective, digital currencies have a higher level of volatility compared to preferred shares and common stock. This is due to the speculative nature of the cryptocurrency market and the lack of regulation in the industry. While digital currencies offer potential for high returns, they also come with higher risks. It's important for investors to carefully consider their risk tolerance and diversify their portfolios to mitigate the volatility associated with digital currencies.
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