Why does Bitcoin’s smaller market cap lead to higher volatility?

[cryptohog]

A: Market cap reflects liquidity. A smaller cap means fewer buy/sell orders are needed to move the price significantly. Gold’s larger cap and deeper market make it more resilient to shocks. BTC volatility also increases during market events or regulatory announcements, even though long-term adoption trends remain strong.

[alex10]

Lower liquidity means Bitcoin reacts sharply to large trades and macro sentiment shifts.

[Nahid Hossen]

Volatility is both the risk and the reward in emerging assets like BTC.