One of the main traits associated with cryptocurrencies is, of course, volatility. And one doesn’t need to look far to see it in action. Being the father of all crypto bitcoin is the quintessential example of the market’s volatility.
Over the last year, since its almost $20,000 high, bitcoin has steadily been declining into a more stable zone within the $6,300-$6,500 regions. Jereon Blokland, an investor from the Netherlands questions just how volatile is bitcoin in a recent tweet.
Current data suggests that the volatility of bitcoin has fallen below that of tech stocks and many major companies such as Amazon and Netflix. In light of recent disappointments in the earnings of the tech industry, after a very promising run, the difference in volatility between the two sectors is especially strongly felt. This tendency might suggest that bitcoin is leaving the speculative nature of the crypto market behind.
When it comes to volatility, tech stocks are the new bitcoin https://t.co/LR3JttARO1— Bloomberg (@business) October 26, 2018
A senior instructor at The Options Institute at CBOE, Kevin Davitt, shared his thoughts on the current situation:
“Perhaps we are witnessing the maturation of a market. It’s far too early to declare this the ‘new normal’ but the persistent range over the last few weeks may be hinting at a structural shift. Time will tell.”
What does a less volatile market mean? Well, as with anything there are always two sides to the equation. A more stable market signifies that speculation will start to fall, which will surely mean that an array of crypto players will become discouraged and will seek a way to make an easy fortune elsewhere.
On the other hand, stability. If the volatility of the market will remain as it is or will fall, then it can be expected that traditional financial systems will look kinder upon bitcoin, since there will be fewer risks. Also, if the increase in the volatility of more traditional markets is to increase, then the crypto sector will probably see an increase in the investors.
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