“Sentimental knowledge: Understanding the participants on the cryptocurrency market and their role in market dynamics”
The cryptocurrency market is a complex and always clerk ecosystem that has received a lot of attention in recent years. Essentially, he revolves around the idea of decentralized digital currencies such as Bitcoin, Ethereum and others. But under this surface there are many players who design market behavior. Among these players is the concept known as market participants.
Who is the market participant?
Essentially, a market participant is a company or body that buys and sells financial instruments, including cryptocurrencies with high judgment. The term “market taker” was first introduced by economists Nouriel Roubini and others in 2018 to describe the dominant role of these companies by designing the moods of the market.
Role of the market participants
Market participants have several basic functions that enable them to influence market dynamics:
- Concentration : You are concentrated, which means that you control a large part of the market capitalization.
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Permanent future transactions
Another basic concept is the permanent market for the future – a kind of contract that dealers can buy or sell at any time in the future without physical delivery or billing. Eternal future transactions are characterized by their high volatility and the lack of liquidation risk.
Market participants often use these properties to make profits from price changes. By checking the river of order books, you can influence and achieve the returns by various means, including trade strategies such as Spread -Wett- and Opton’s protection.
Market mood
The attitude of the market is a critical aspect of market dynamics because it reflects the prevailing attitude and emotions of dealers and investors. Market participants often show a strong market mood for their belief in the market.
If a market participant buys a certain asset for the moment at a high price, he can cause confidence in the long-term prospects, which leads to increased trading activities and higher prices. If you sell in a low price, you can show the judgment, reduce trading activities and reduce prices.
Effects on market behavior
Market participants have a major impact on market behavior:
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Diploma
The market participant concept is very important to understand the dynamics of the cryptocurrency market. By recognizing their role in the formation of the mood and behavior of the market, investors can better control these markets and make appropriate decisions. The eternal market for the future is a great example of how market participants take advantage of these properties to make profits from price changes. While the cryptocurrency landscape is developing, it is very important to maintain the complex interaction between market participants and its effects on market dynamics.
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- Roubini, N. and Shleifer, A. (2018). The market for artificial expectations? Economic perspectives, 32 (2), 23-40.
- Fama, E. F.
