How does low float affect the volatility of cryptocurrencies?

nin yoApr 13, 2022 · 3 years ago1 answers

Can you explain how the concept of low float impacts the volatility of cryptocurrencies? I've heard that low float can lead to increased price swings, but I'm not sure why. Could you shed some light on this?

Cryptocurrencies

Volatility

Low Float

1 answers

Apr 13, 2022 · 3 years ago
At BYDFi, we understand the impact of low float on the volatility of cryptocurrencies. When the float is low, it means there is a limited supply of tokens available for trading. This limited supply can make the market more sensitive to changes in demand, leading to increased price volatility. Traders should be aware of the potential risks and rewards associated with low float cryptocurrencies and develop strategies accordingly. Remember, volatility can present opportunities for profit, but it also carries higher risks. Stay informed, stay vigilant, and make informed trading decisions.