Crypto Volatility: A Double Edged Sword

Volatility in crypto is well known thing. Cryptocurrency values are subject to extreme upward and downward swings. For investors, this volatility may be both blessing and curse.

Although the original purpose of crypto was to offer more reliable and predictable alternative to conventional fiat currency. Crypto, however, have shown to be much more volatile than fiat money. There is no such thing as risk free investment.

The cyclical nature of crypto is, in my opinion double edged sword. It can result in big losses for regular investors who are unable to Time market accurately but it can also result in high gains for those who are able to do so.

Example of El salvador is one benefit of crypto volatility. El Salvador became first nation to formally recognize btc as legal tender in 2021. Salvadoran government has bought btc worth billions and given it to its people. According to salvadoran government, btc can increase financial inclusion by lowering El salvador's dependency on us currency.

Example like Luna foundation guard ( Lfg ) tellls about risks associated with crypto volatility. Lfg was nonprofit corporation tasked with preserving Terra usd stablecoin's peg to us dollar. Terra usd stablecoin lost its peg in May 2022, and Lfg's reserves were exhausted. Investors lost billion of dollars cz of Lfg's collapse.

Before investing in crypto, investors should be informed of risks involved. Additionally, investors need to have strategy for dealing with market volatility

So what approach in your opinion, can investors take to minimize risk of crypto volatility?