Diar Research Shows Bitcoin Hitting 14-Month Record in Stability is Very Healthy
Bitcoin Achieves 14-Month Record in Stability
Diar, a group of researchers, has recently published new reports that revealed that the volatility of Bitcoin has declined to a 14-month low now. According to the data, Bitcoin has experienced a steep decline from the end of the $8,000 mark and above the $5,850 mark. However, after that, the market has remained somewhat stable for almost three weeks.
The researchers from the Diar team affirm that major financial institutions are keen to enter the Bitcoin game and trade in cryptos, however, this made the token be used more like an asset class, which improved its volatility, than as actual money. The researchers believe that the volatility downtrend is very good news and that this can be very healthy for Bitcoin.
Low Volatility Is Healthy For Long-Term Growth
Mati Greenspan, an eToro senior market analyst, has recently expressed his optimism on the future of Bitcoin, which had some of its most volatile months in 2018. According to Greenspan, the most important aspect of Bitcoin to most financial investors is not necessarily the ability to speculate (as they can do it in other markets) but to store value in an independent manner of the global economy.
As it is believed that gold, Bitcoin and Ethereum move in an independent way from the broader financial market due to the lack of correlation with conventional assets and reserve currencies that they have. As Greenspan explained, lower volatility is a very important characteristic for long-term investors because they can see Bitcoin as an alternative offshore banking market.
According to him, when you consider how to store wealth, people want something that can increase over time but does not have a lot of risk. Bitcoin is a double-edged sword in this aspect because its volatility is very high, so it can go one way or the other. The gains can be fast but the losses can be huge, as well.
Some experts believe that Bitcoin will face massive adoption of the offshore banking market before merchants really start to use it. Greenspan believes that stability is essential to the market because a steady price range can be very healthy and make people really believe that Bitcoin is an asset that you can really use to store value instead of using it for speculation.
Has Bitcoin Reached Rock Bottom?
Some people are wondering whether Bitcoin has reached its lowest point. Historically, after a major 70 to 90% correction, Bitcoin has always been able to go back up to its major all-time high again. This happened in 2012, 2014 and 2016, so many there is some logic in believing this will happen in 2018, especially now that the currency was able to actually get some months of stability after dropping a lot.
While it is possible for Bitcoin to rise in price again without stability, this generally can also mean that when the prices fall, they will fall hard. Without a proper stabilization, Bitcoin can crash by large margins, like when it tested the $10,000 USD mark and then dropped all the way to $6,000 after that.
Because of this, we should not doubt that there is some important value in the last three weeks of stability in the Bitcoin market. Cooling down is a good thing because it enables the investors to believe that they can use Bitcoin again.