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Why do altcoins fall below their issue price (why do altcoins have such high volatility)?

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Why do altcoins fall below their issue price? In November 2018, the price of alt

Why do altcoins fall below their issue price (why do altcoins have such high volatility)?

Why do altcoins fall below their issue price? In November 2018, the price of altcoins experienced a significant decline due to the presence of a massive bubble in the cryptocurrency market. According to analysis data from BitMEXResearch, the issue prices of Bitcoin and altcoins have been below the average level for three consecutive quarters, which explains why many altcoins have fallen below their issue prices. The first reason is that most projects lack the necessary technology, economics, or technical capabilities to sustain their value. The second reason is that many altcoins are more speculative in nature compared to other mainstream cryptocurrencies, and these tokens are often considered fraudulent because they are unwilling to disclose their full information. The third reason is that many projects are based on blockchain technology, and thus they usually do not generate profits. The fourth issue is that most projects are attempting to solve this problem by utilizing existing technology, but currently no method has been found to attract funds.

Why do altcoins have such high volatility?

According to bitcoin.com, the recent volatility of altcoins is shocking. According to data from cryptocurrency research institution CoinMarketCap, as of June 1st, the price of Bitcoin (BTC) was around $20,000; other altcoins such as Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) had market values exceeding $10 billion. The majority of these digital currencies are altcoins. The trend since August 2017 has shown the emergence of many altcoins in the market. However, their prices almost doubled at the beginning of 2018, in stark contrast to the rate of increase in 2017. But now the situation seems much different, as there is insufficient demand for them in the market. To make predictions about the future, we need to observe their historical performance first and then consider whether they will continue to rise.

Currently, the main reason is that there are two types of altcoins: ones that represent cryptocurrencies with Bitcoin as the representative, and ones that profit through the use of altcoins. The most famous one is Litecoin, which has a value far exceeding its mining cost. Litecoin was initially developed by a large technology company in the United States, and it was later acquired by many people for trading purposes. Since the project uses Bitcoin as a payment method, there is no blockchain that can do exactly the same thing. The issuer of Litecoin recently announced the launch of a product called “Litecoin,” aiming to help people conveniently purchase cryptocurrencies and other assets. Additionally, there are other public chains similar to EOS and Tezos, such as Polkadot, which utilizes blockchain technology to enhance security.

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