Bitcoin is now considered quite mature compared to the cryptocurrency market in 2011.
Bitcoin’s daily trading volume exceeded $4.5 billion at the beginning of this month.. Even the world’s most traded stock, Apple (AAPL), does not have such a large trading volume.
The Width of the Bitcoin Market means that it is strong in the Long Term
The usage areas of the Bitcoin market are increasing day by day. It is an excellent indicator for Bitcoin, as it evolves over time and the volume of transactions increases.. Prior to this, Bitcoin was frequently criticized by senior executives and government officials in traditional financial markets.. For example, European Central Bank president Mario Draghi made a statement at a press conference that the Bitcoin market was “not mature enough” for consideration:
“ When something new comes out, people have high expectations as well as high doubts.. Our opinion of Bitcoin and other cryptocurrencies is that they are not mature enough to consider.. That was one of the important lessons we learned in the global financial crisis of 2008. All new fintech must be handled with care and with potential risks in mind.”
Of course, that statement is a thing of the past.. Bitcoin is now ripe for the European Central Bank and other banking institutions. Financially leading regions such as Japan, the USA and South Korea have already prepared the necessary infrastructure and issued regulations for cryptocurrencies.. Assuming that demand, liquidity, user numbers, and market value for Bitcoin are increasing at an incredible rate, these countries are perfectly right to act quickly.
However, there is an even more important factor: volatility and fragility, namely volatility. The chart published by renowned Bitcoin analyst and investor Chris Burniske shows that Bitcoin’s volatility values have decreased significantly over the past 6 years.
As liquidity increases, Bitcoin’s daily volatility drops. Chart by @cburniske. pic.twitter.com/JsliQZzlGf
— Tuur Demeester (@TuurDemeester) October 22, 2017
“As liquidity increases, Bitcoin’s daily volatility drops. Chart by @cburniske.”
As experts like Andreas Antonopoulos have pointed out earlier, spikes in the price of Bitcoin are also an indicator of volatility.. However, as the Bitcoin market matures, such price fluctuations due to users’ trading is expected to decrease.. Bitcoin’s presence in the financial industry depends on the stability of the price…
Contribution of low volatility to Bitcoin
December 2016 BTCC Strong> CEO Bobby Lee said that Bitcoin’s low volatility values are a sign of maturity:
“Low price volatility is a good thing for Bitcoin. The settling of market maturity is an indication that people can also store their money digitally.. Bitcoin’s market cap may exceed 12 billion dollars.”
Although 12 billion dollars seemed very high back then, its current market cap 99 billion dollars; almost 9 times the quoted value. Although the market cap and price of Bitcoin have skyrocketed in a short period of time, the volatility can be considered relatively low.. Price corrections to Bitcoin have been less effective than before, and the market has been generally positive throughout this period.. In addition, volatility has remained at a rate of 4 over the past year.
Antonopoulos said in the summer of 2015 that high volatility is the growth of Bitcoin even if the price rises.
“Don’t get too excited about the positive ‘manipulation’ of the bitcoin price.. Even if the price goes up, volatility is still a bad thing.”
In summary, as the Bitcoin market matures, volatility will drop rapidly from 4. This is of course a good indicator for price stability.
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