1. Price Volatility: A Market That Never Sleeps

DPTs like Bitcoin and Ethereum don’t follow the usual rhythm of traditional markets. They trade globally, 24/7, across countless platforms with no central pricing system. This around-the-clock activity brings with it rapid price changes that can be thrilling to some, but overwhelming to others.

Unlike conventional stocks or bonds, crypto assets can swing dramatically in a matter of hours. For instance, it’s not uncommon to see 20%, 30%, or even steeper movements within a single day. While these surges attract attention, the downward movements can be equally swift and steep.

Some may view leading tokens as relatively stable, but even the most well-known assets have shown they are not immune to large corrections. The sentiment of the market can shift on a dime, and what appears to be a winning position can quickly turn red.

At Coinut, we make it a priority to avoid presenting DPTs as low-risk or stable investments. We believe in presenting a fair and balanced view so traders can engage with clarity, not confusion.

Cryptocurrency is generally more volatile than traditional stocks and capital market products due to several interconnected factors:

• Market Maturity and Size: Cryptocurrencies are a much newer asset class compared to stocks, which means even moderate trades or events can cause outsized price swings.
• Liquidity: Different cryptocurrencies may have different levels of liquidity as compared to traditional listed capital market products. This means there can be fewer buyers and sellers at any given time, so large transactions can move prices dramatically. Traditional markets generally have deeper liquidity, which helps buffer against extreme price movements.
• Regulatory Uncertainty: While regulatory certainty in Singapore and most Tier-1 jurisdictions have come a long way since the inception of cryptocurrencies, there is still some room for further clarification and consistency in the crypto space. When major regulatory news breaks—such as government bans or new rules—it can trigger sharp price reactions. Traditional financial markets, by contrast, operate within well-established regulatory frameworks that provide greater stability.
• Sentiment-Driven Trading: Crypto markets are heavily influenced by market sentiment, often amplified by social media and news cycles. This can lead to rapid, emotionally-driven price changes. While this may be the case for certain stocks, generally listed capital market products are less likely to be susceptible to such volatility, as these are often anchored to company fundamentals and financial performance.
• Price Discovery and Immaturity: Some cryptocurrencies are still in an early stage of price discovery, with investors and speculators trying to determine their fair value. This is particularly of concern amongst memecoins. This ongoing process leads to frequent and sometimes extreme price adjustments. 
• Concentration of Holdings: A small number of large holders ("whales") can have a significant impact on prices in the crypto market. Their trades can lead to substantial volatility, a dynamic less common in the more widely held listed capital markets space.

Lack of Intrinsic Valuation Metrics: Listed capital markets products are tied to corporate earnings and business fundamentals, providing a basis for valuation. Crypto assets often lack these anchors, making prices more susceptible to speculation and hype.