Bitcoin Is A Traditional Market According To Institute Of Nuclear Physics Professor In Poland
Bitcoin and the crypto market has been called a lot of things over the past few years. It has been compared to the Tulip mania of the 17th century to the DotCom bubble of the 21st century. However, someone comparing it to traditional market is something new.
Last week, researchers at the Institute of Nuclear Physics in Poland issued a paper that insists the Bitcoin market reflects many of the same numerical patterns as traditional markets. To break this assertion down in layman’s terms, lead researches on the paper and the head of the Complex Systems Theory Department at the Institute, Stanislaw Drożdż sat down for an interview with Finance Magnets.
Drożdż’s team’s interest in crypto arose in March this year primarily from this fact they were seeing creative patterns emerge in the crypto markets seemingly out of randomness. In March their research found that the Bitcoin market, through progressive self-adoption since its initiation, is already following the same kind of price-fluctuation models as the world largest traditional markets like the S&P500, currency exchange market, oil or gold. This points to both, the extent of the relativistic changes in prices as well as to the transient method of those changes.
When asked if his findings will restore trust in crypto markets, the professor said:
“I prefer to avoid speculation. There is, of course, a lot of mistrust and so on, which is natural when some new quality, in this case, Bitcoin, emerges but the facts are what they are – the Bitcoin market does bear a strong similarity to traditional markets.”
He goes on to remind that there are already many people who trust in Bitcoin and the market has passed its infancy. Bitcoin’s recent stability is the proof that it has already started to follow a recovery trend.
Although Drożdż thinks that traditional financial regulation might not be sufficient to govern Bitcoin.
“But it [Bitcoin] being decentralized and having a limited supply may mean that any regulation will have to be more unique to address the nuances of the Bitcoin market.”
He was asked about the disparity between the traditional and Bitcoin market to which he replied that at a superficial level the two markets are poles apart, however, on closer inspection, it became apparent that the variations between the two were coming from the first two years of Bitcoin trading. Once the market started to mature, those discrepancies began to sink.