Ethereum – a cryptocurrency with a $400 billion market capitalization that’s second in the space only to Bitcoin* – fell more than 25% from its highs of a week prior at one point last Tuesday, September 7th. Nasdaq futures made new all-time highs the same day.
Technology Stocks | Stocks, in General | Gold | US Dollars |
---|---|---|---|
+0.3 | +0.2 | -0.1 | -0.2 |
Source: Yahoo! Finance (https://finance.yahoo.com/)
This year alone, Bitcoin has both doubled and halved its value. Pit that kind of volatility against one of its most highly correlated stock sectors in technology and it isn’t even a fight. Not to mention that BTC is moving almost five times as much as STIX on a daily basis (see stats below). While this excitement has no doubt brought more participants to markets, which can be viewed as a very positive development for other financially active individuals, there is one potentially rough side to all of this: Of course, you have to cut your teeth somewhere but doing so with a product that has the potential to move thousands of dollars in a flash might not be the best way to kick off a long portfolio life. It’s seldom advisable to try anything new with its most chaotic version (examples include: swimming in deep end, hiking in Himalayas, option trading in naked short VIX calls). Source: Yahoo! Finance (https://finance.yahoo.com/) and dxFeed Index Services (https://indexit.dxfeed.com) It’s hard to put cryptocurrencies in a box. They move like nothing else currently in the market, and they don’t seem to be going away anytime soon. But until everyday traders get a smaller, more accessible product, they might want to put that box on the shelf. *Ethereum data from coinmarketcap.com as of 9/9/21 — © 2021 Small Exchange, Inc. All rights reserved. Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information in this advertisement is current as of the date noted, is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading futures involves the risk of loss, including the possibility of loss greater than your initial investment. Source: https://www.danielstrading.com/2021/09/13/does-crypto-belong-in-your-portfolioWalk Before You Run
Many entrants into markets are learning how to invest and trade using the most volatile asset class established in decades.
Daily Move in % and $ (in 2021)
Micro Bitcoin
FuturesSmall Crude Oil
FuturesSmall Technology
FuturesSmall US Dollar
Futures
+/-5.3%
+/-$225+/-2.1%
+/-$135+/-1.2%
+/-$80+/-0.3%
+/-$40
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