European Scientists Share How Cryptocurrencies will Rival Forex Markets
According to a recent research report that has been published by a group of European scientists Bitcoin and the cryptocurrency market can compete with the forex market in terms of maturity. That means that Bitcoin could soon become a dependable alternative to the traditional financial market.
Back in July 2018, the research was published in the scientific magazine known as An Interdisciplinary Journal of Nonlinear Science. This magazine is published by the American Institute of Physics (AIP).
The study was prepared by the Polish Academy of Sciences in Krakow and presents a very positive outlook for virtual currencies. According to the report, Bitcoin followed trends that are similar to other traditional markets. Specifically, the popular virtual currency has a similar trend that can be compared to other fiat currencies.
As per the report, the analysts studied Bitcoin fluctuations between 2012 and April 2018. According to them, the last two years show that Bitcoin is getting mature very fast. The study shows that the cryptocurrency price movement followed the rules laid down by Inverse Cubic Law that establishes a correlation between trading activity, price fluctuation and other factors.
This allows determining the stability of a specific market. The report reads as follows:
“Initially, the graphs we got were a bit crooked, which did not augur anything promising. However, when we took a closer look at the data, suddenly it turned out that this crookedness originated from the first two years of the analyzed period, that is, from the time when the market was just starting to shape itself. later on, the rates of return fluctuated according to the inverse cubic law.”
Additionally, the scientist explained that Bitcoin is also performing as other traditional markets that are more mature, established and recognized. The researchers explain that they have detected multifractality in the functions of fluctuations in the rates of return. This is particularly evident in the last six months of the examined period. The scientists believe that this is the same type of movement as for regular and mature markets including the dollar, oil or bond markets.
In the future, the market could change and become mature. The same can happen with other virtual currencies. If this happens, the Forex market can have a very real competitor.