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The crypto market is dynamic and constantly changing. Prices of digital currencies can rise or fall sharply within hours, or even minutes. These sudden price movements are called volatility.
For many beginner investors, volatility sounds like a warning sign, something to avoid. Volatility isn’t just a risk; it’s also an opportunity. In this article, we explain what volatility means, why it matters in crypto, and most importantly, how Yieldfund uses it to generate strong and steady returns for investors.
Simply put, volatility is the degree to which prices change. If a coin is worth €1,800 today and €2,000 tomorrow, that’s high volatility. If the price stays between €1,790 and €1,810, volatility is low.
Volatility exists in all financial markets, but it’s especially high in crypto. That’s because the market is young, operates 24/7, and reacts strongly to news, regulations, and public sentiment. These constant changes make crypto one of the most volatile markets in the world.
The chart below shows a good example of high volatility of the Bitcoin price.
Several key factors drive volatility in crypto:
Summary: Although the crypto market is still sensitive to price movements, increasing adoption and maturity, especially with larger coins such as Bitcoin, are making extreme fluctuations less frequent. Still, volatility remains a defining feature of this market.
While many investors feel nervous during price swings, we see opportunity. Crypto prices rise and fall fast, and if you understand how to manage that, it opens the door to profit.
Many traditional investors rely solely on price increases to generate profits. However, in a volatile market, that approach isn’t enough, you also need to be prepared for price drops. At Yieldfund, we use both long positions to anticipate upward price movements and hedge positions designed to profit from or protect against expected declines.
In a highly volatile market, where cryptocurrency prices can swing 10% or more in a single day, this strategy proves highly valuable. It allows us to actively seize opportunities in all market directions, rather than passively waiting for better conditions.
Volatility can’t be used without managing risk. That’s why Yieldfund spreads investments across many cryptocurrencies and strategies. We invest not only in popular coins like Bitcoin and Ethereum but in the top 10 cryptocurrencies.
In addition, our positions are flexible. This means that we avoid certain assets when volatility increases in a specific market segment. For example, if a currency seems too risky or overvalued, we choose not to trade this asset.
We use smart stop-loss mechanisms and DCA limit orders to manage risk when unexpected price movements occur. This allows us to reap the benefits of volatility while always trading safely and with strategic insight, thanks to our advanced trading algorithm.
Volatility isn’t for everyone. If you prefer stability, traditional markets might feel safer. But if you believe in crypto’s future and the power of technology, volatility can be a great opportunity.
Yieldfund offers a way to take advantage of this, without having to watch the market yourself. Our technology and expertise handle the strategy, so you can benefit from crypto’s potential with less effort.
Volatility is a key feature of the crypto world. It represents the price swings we see every day. While some see this as a threat, Yieldfund sees it as a strength.
With our trading algorithms, flexible strategies, and strong risk control, we turn volatility into returns. Our approach is designed to actively profit from a market that never stands still.
Want to learn more about our strategies and how Yieldfund takes the worry out of investing? Feel free to contact us. Discover how we invest in the future.
Disclaimer: This text is for informational purposes only and does not constitute investment advice or recommendation.
Entry price
23.6002
Exit price
23.7330
Date
May 16, 2025
Entry price
2.3620
Exit price
2.3487
Date
May 16, 2025
Entry price
170.6731
Exit price
171.6100
Date
May 16, 2025
*The trade percentages are the net percentages. The trade costs have already been deducted.
Frontpay capital B.V.
TAX ID: NL863073165B01
CoC number: 84040823
Headquarter
Hanzeweg 5, 7418AW Deventer
Other locations
Pieter Baststraat 30H, 1071TX Amsterdam
Baysquare Building 12 P Floor – Business Bay – Dubai
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To help you choose the right investment