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Why Ethereum Classic (ETC) Is Extremely Volatile Today

BY Benzinga | ECONOMIC | 08/05/24 03:47 PM EDT

Ethereum Classic (CRYPTO: ETC) is trading lower by some 8.1% to $17.90 during Monday’s session. Shares of several altcoins are fluctuating amid significant volatility in global markets. Despite a 13% overnight drop in Japan's Nikkei 225, Wall Street in general avoided a Black Monday as stock indices curbed early session losses by midday trading in New York.

Concerns about a global recession, geopolitical tensions and economic policies such as the Bank of Japan raising interest rates have led investors to reassess their portfolios, potentially pulling out of riskier assets, including cryptocurrencies.

The liquidation of a significant number of leveraged positions, particularly in major cryptocurrencies, also have the ability to create a cascading effect across the entire market. Leveraged positions hitting stop-loss thresholds overnight Sunday likely led to automatic sell-offs, further driving down prices.

Read Also: Will Investors Follow Warren Buffett’s Lead And Dump Apple Stock?

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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