Analysis of cryptocurrency price volatility and its impact on global financial markets

Abstract

The article examines the challenges of high cryptocurrency volatility and its impact on financial market stability. It has been established that the rapid growth of the cryptocurrency market, combined with its lack of regulation, poses significant risks for investors and financial institutions. The relevance of the study is determined by the increasing role of cryptocurrencies in the global economy and the need to implement mechanisms to stabilize the market. The aim of the study is to analyze the factors of cryptocurrency volatility, determine their influence on financial systems, and develop recommendations for effective risk management.

The research employs statistical analysis methods to study the dynamics of cryptocurrency price fluctuations, comparative analysis to evaluate the effectiveness of different regulatory approaches, and analytical methods to synthesize data and formulate recommendations. The analysis is based on current data from cryptocurrency exchanges and statistical platforms.

The study reveals that the primary factors driving cryptocurrency volatility include uneven regulation across jurisdictions, dependence on macroeconomic conditions, and technological characteristics. It has been proven that the lack of a unified regulatory approach creates additional risks for institutional and retail investors. Recommendations for investors include portfolio diversification and the use of algorithmic strategies. Regulators are advised to implement licensing of cryptocurrency exchanges, establish reserve requirements for stablecoins, and use smart contracts to automate regulatory compliance. Financial institutions are encouraged to implement internal risk management mechanisms and ensure a high level of cybersecurity.

The conclusions confirm that the synchronization of regulatory approaches at the international level is a necessary condition for stabilizing the cryptocurrency market. Prospects for further research include analyzing the impact of cryptocurrencies on financial stability, evaluating the consequences of regulatory changes, and studying the effectiveness of risk management in conditions of high volatility.