Bitcoin price volatility is the biggest issue or concern today for users to invest.
Sometimes, when price of bitcoin going upward then it look like roller coaster. Similar case in downward chart of bitcoin price.
The zig-zag diagram in the price chart or share price, making investor uncomfortable to invest for long term. That’s why, new algorithm has came in the picture and manages bitcoin prices volatility for everyday for every user of bitcoin or blockchain technology fin-tech users.
The newly launched algorithm for Bitcoin trading, TWAP (Time Weighted Average Price), could save both money and headaches for people and companies not equipped for higher risk.
How new algorithm works for your trade?
When the price of bitcoin was $400, it was dropped down to $350. This price fall is never good for any trade or currency. It can be happen because of annoying price drop feature or trade stories.
This kind of volatility makes uncomfortable situation for user and investor of trading.
It creates risk and second difficult situation for your stakeholders.
Stakeholders care approximately your Bitcoin trading strategies. This includes the CFOs of firms (e.g. Bitcoin mining firms), your limited associates, suppliers, merchants and customers who are relying a props you to profit them the best price. Using digital currency is risky ample for customers, and asking them to understand concerning new trading risk is cumbersome. They don’t ask you to predict the market but they pro ask that you manage to pay for them a fair rate.
One habit to explore and communicate your deed is to use a benchmark. A delightful benchmark averages out the volatility and provides you behind a price that your stakeholders can trust. Digital currency fund managers, for example, use benchmarks to scrutinize their trading strategies and make distinct they are not engagement-court war extra risk. Payment companies who have inflows of digital currency throughout the daylight often use a benchmark rate to communicate to their customers.
How Good Is It?
As pleasant as a safety bar in savings account to the order of a roller coaster. Using historical data, SFOX simulated how the TWAP algorithm would take steps. We ran simulations almost complex days considering high and low volatility. We plus ran simulations at exchange lengths. Included under are two swap simulations.
For a number of types of investors and strategies, TWAP is ideal and especially therefore gone trading a large number of bitcoins.