GlossaryBeginner
Volatility
How much and how quickly an asset's price tends to move over a given period.
Volatility describes how much an asset's price moves, and how quickly, over a given period. A highly volatile asset can gain or lose a large percentage of its value in a short time; a less volatile asset tends to move more gradually.
Many cryptocurrencies have historically shown higher volatility than more established traditional asset classes, which changes how much risk a given position size actually represents.
Examples
- A cryptocurrency that moves 10% in a single day is considered highly volatile.
- Higher volatility means both potential gains and potential losses can be larger and faster.