Bitcoin Economics: Volatility

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Bitcoin is a perfect example of extreme volatility. Lets break it down to the basics.

Need to Know: Finance

Finance and Economics are two similar fields of study, but they make important distinctions that any dark net market professional should know. First, both fields define volatility as the measure of how quickly an investment, asset, or currency changes with time. Financiers typically quantify volatility as the standard deviation of daily returns for a given period of time. This information is valuable for derivative trading because it is used to calculate moving averages and trends. Volatility is also a strong indicator of the amount of risk an investment has.

The more “liquid” a market, the more volatile is can become. Liquidity is a financial concept quantifying the degree to which an investment, asset, or currency can be bought or sold quickly on the marketplace. For example, the stock market contains large portions of liquid stocks, but most investors don’t buy and sell stocks everyday, making a portion of the market not liquid.

Need to Know: Economics

Macro-economists, or economists that study large scale or government economics, use volatility figures to highlight macro-level economic trends and patterns. When a market experiences volatility

Read more ... source: DeepDotWeb

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