MicroStrategy’s Michael Saylor talks about he key factors that trigger volatility in the crypto markets.
MicroStrategy founder and CEO Michael Saylor has recently talked about the factors that he believes are contributing to the wild price swings in the crypto markets.
What’s driving the volatility in the crypto markets?
In a new interview with CNBC, the Bitcoin (BTC) bull made sure to explain that the lack of clear regulations plays a part in the volatility of crypto markets.
He believes that this specific factor allows investors to trade in ways typically not permitted when dealing with stocks and other traditional assets.
“The volatility is driven by the immaturity of the asset class. The lack of wash trading rules – you can buy and sell [crypto assets] within the same hour…I think that’s fairly immature.”
He also said that “I think 20x leverage on the off-shore exchanges, I think the Wild West of crypto derivatives, the cross-collateralization of altcoins into ETH [or] BTC through decentralized finance (DeFi) exchanges on a Saturday night through a very thin piece of liquidity on the 177th-biggest coin – all of those things are a recipe for volatility.”
Saylor also made sure to highlight the fact that while the uncertainty around upcoming regulations may cause more volatility at first, it will eventually lower the price instability of cryptos.
He also believes that this factor will be setting the stage up for blue-chip investors to begin supporting cryptos.
He said that there is a strong uncertainty about the regulatory environment because regulation impacts all the crypto systems and they are cross-collateralized to each other.
He basically said that volatility is something normal, and it “comes with the territory.”
The crypto market has now exploded amidst the geopolitical situation involving Ukraine and Russia. Stay tuned for more news, and keep your eyes on the market.