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Understanding peer-to-peer trading in the context of circulating delivery and volatility of prices
In the area of cryptom trading, the peer-to-peer (P2P) markets appeared as an important player. P2P platforms allow users to trade cryptocurrencies directly with each other without the need for intermediaries such as brokers or exchanges. However, this raises several questions about the circulation of supplies, volatility of prices and market dynamics.
circulating power supply
In traditional trading systems, the amount of cryptocurrency in circulation is determined by the forces of supplies and demand in the market. If new coins are issued by mining or other means, they increase the available offer and reduce the value of existing coins compared to each other. This phenomenon is known as a circulating supply.
For example, the supply of bitcoins circulation was around 13 million in February 2017. When miners began to move from the use of the SHA-256 to Scrypt mining algorithms, new coins were added to the network, increasing the available supply and reducing the value and reducing the value of existing coins such as Bitcoin Cash (BCH) and Dogecoin (BCH) DOGE).
Price volatility
Over time, pricing volatility concerns fluctuations in the price of the cryptomena. When P2P markets appear, they introduce various factors that contribute to the volatility of prices including:
1
- Order flow : Number of purchase orders and market sales may affect the price direction.
- Market liquidity
: Availability of buyers and sellers may affect the stability of the price.
- Regulatory uncertainty : Changes in government regulations or policies may affect investor confidence and consequently prices.
P2P markets often show priced pricing volatility than traditional trading platforms for several reasons:
* Lack of central body : P2P markets operate without restrictions on a single entity that controls the market.
* Higher transaction costs : The use of decentralized networks may increase transaction fees and latency.
* Increased market complexity : P2P markets include several actors with different interests, leading to more complex prices dynamics.
Circulation delivery and volatility of prices
The relationship between the circulating supply and volatility of prices is still an open issue in the cryptomen space. Some scientists claim that increased circulation can lead to higher prices as a result of:
* Increased demand : When new coins are added to the network, existing holders can sell their coins at higher prices.
* Reduced competition : Lack of a particular coin may increase its value as a result of a reduced delivery.
On the other hand, others suggest that the supply of circulation can lead to lower prices if:
* There is an excessive offer : When too many coins are mined or added, the available offer may be too high compared to demand.
* Lack of deficiency : If a particular coin has no own value or usefulness, its price may not be affected by circulating delivery.
Relieving volatility of prices
To minimize prices volatility in P2P markets:
- Use limit orders
: Set up stops and other types of order management orders.
- Diversify the shares : The spread of investments in several coins and asset classes.
- Monitor market sentiment : Analyze trends, messages and social media to find out the market emotions.
Conclusion
Peer-to-peer trading in the context of circulating supply and volatility of prices is a complex problem with advantages and disadvantages. By understanding these factors, users can make informed decisions about their investment strategies and mitigate potential risks.
