Exchange operators are aware of the risks associated with cryptocurrency. In fact, they may know this better than anyone else. Jesse Powell, CEO of the Kraken Exchange, advises traders to do their own research. He even mentions how users should not rely on information sourced from exchanges. That seems rather counterproductive, but it is a valid statement regardless. Especially when it comes to price volatility, there’s little exchanges can do.
Buying Bitcoin is a big risk. The same applies to any investment vehicle or other investment people can make. It is time users do their own research before buying something they do not understand. This is especially true when it comes to Bitcoin and other digital currencies. We are not talking about an asset that cannot lose value. Most people noticed the Bitcoin price lose over 50% this year alone. Such drops occur regularly and the next one will happen soon enough.
Research Market Volatility Before Investing
It is evident cryptocurrencies attract a lot of attention. Most people fail to realize they are solely responsible for their holdings. It is not up to exchanges to protect customers from volatility. Instead, they will ensure money cannot be stolen or hacked. A big drop in price is not something exchanges cna prevent, depending on market sentiment. It is evident this volatility will only intensify as more time progresses. More people holding on to Bitcoin will not lead to less volatility by default. In fact, the market will never be without volatility.
Kraken CEO Jesse Powell explains it as follows:
“I think ultimately consumers need to look out for themselves, look into the fundamentals of any coin and not rely on any particular exchange to protect them from market volatility. e make no promises about the future of any coin, things can change when you raise $1 billion in 10 minutes.”
The allure of cryptocurrencies has certainly not diminished. So many coins have soared during the past year. A lot of people become a millionaire in just a few months. Everyone wants to know what that feels like and they are willing to take big risks to achieve it. Only time will how much much this volatility hinders those chances. Those who are patient and don’t panic sell will win out eventually, That i much easier said than done when the markets drop by 20% or more, though.
Header image courtesy of Shutterstock
