Market correlation: how they interact several cryptos
The cryptocurrency has recorded rapid growth in recent years, many new coins are broken and existence is growing. At the same time, as for all activities of activities, there are several cryptocurrencies that can influence the correlation of the market with different characteristics. In this article, we strive how cryptocurrencies contact each other, highlighting the relationships, differences and possible most important consequences of investors.
Cryptocurrency market overview
The cryptocurrency market is closely connected and various tools influence mutual prices and performance. This connection derives from the following reasons:
- Exchange bag commissions : If a new cryptocurrency is listed on the stock exchange, it will translate into commissions on the bag that are often set at 10-20%. These commissions can significantly affect the volume of trading and the market correlation with existing cryptocurrencies.
- Safety risks : cryptocurrencies with high safety risks can experience greater volatility due to the greater probability of hacking or other safety violations.
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Correlation between the different cryptos
The relationships between the different cryptocurrencies vary according to their characteristics, use and acceptance levels. Here are some examples of how cryptocurrencies contact each other:
Bitcoin (BTC) vs. Ethereum (ETH) **: BTC tends to overcome the values store due to a stronger recognition of the brand, higher safety standards and a more well -founded use.
* Litecoin (LTC) vs. Bitcoin Cash (BCH) : LTC has worked historically better than BCH, probably due to its faster transaction speed and the lower commissions than BCH.
* Monero (XMR) vs. Zcash (Zec)
: Monero’s private transaction method was more popular with users, with higher prices than Zcash.
* Chainlink (link) VS. Uniswap (UNI) : the relationship is set at the price of BTC and ETH as it has a close correlation with these two cryptocurrencies.
Main correlations
Here are some key relationships between the different cryptocurrencies:
* Bitcoin vs. Ethereum : related up close, beyond Bitcoin, Eth in terms of market capitalization.
* Litecoin vs. Bitcoin Cash : moderately correlated, it works better than LTC of the faster transaction speed of BCH and the lower commissions.
* Monero vs. Zcash : In a method of private transaction of Monero scarcely correlated, it leads to higher prices than Zcash.
Differences of cryptocurrencies
Various cryptocurrencies have characteristics that can affect market correlation:
* Security : stronger safety standards lead to better market performance and less volatility.
* Case of use : several cases such as mining or payment commissions affect the market capitalization of each cryptocurrency.
* The level of adoption : higher adoption levels involve greater liquidity on the market, influencing prices and correlations.
Conclusion
Market correlation between the different cryptocurrencies is a complex question in which several factors influence their interactions. Understanding these correlations can help investors make decisions for investors while navigating the cryptocurrency market. By recognizing the most important correlations, the differences and possible consequences of each cryptocurrency, investors can be better prepared for the development region of the activity class.
More tips for investors
- diversifies your portfolio : distribution of investments between the different cryptocurrencies to minimize the losses due to market fluctuations.
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