"If Bitcoin is a currency, shouldn't it be such a big price volatility?" This question was asked by many skeptics who always thought that digital assets were a joke.
Since the advent of Bitcoin in January 2009, the volatility has been basically declining, but in terms of performance in 2019, stability is still a bit weak. According to Coin Metrics, the bitcoin 60-day return volatility hit a new high since the beginning of 2018 during the current cryptocurrency bubble burst.
The bitcoin 60-day return volatility on July 7, 2019 was 5.4%, only a little higher than the volatility after the bitcoin collapse in November 2018 – however, this volatility in 2019 is positive.
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Bitcoin 2019 volatility
Bitcoin has been on the rise this year, and the price of the dollar has risen by more than 200%.
There are also various arguments as to why bitcoin volatility will return to the problem in 2019. In a recent interview, Circle CEO Jeremy Allaire believes that long-term players who believe in the future potential of Bitcoin will be bargaining at the end of 2018. This phenomenon was also mentioned in the report released by Adamant Capital and Delphi Digital earlier this year.
In addition, a recent study by SFOX, a cryptocurrency trading platform, points to the relationship between rising bitcoin prices and holidays. The SFOX research team used China's Spring Festival as a holiday FOMO and bought a case (FOMO, Fear of missing out, which is what we often call "fear of the air").
Many people think that the bitcoin in June this year was due to the news that Facebook launched Libra cryptocurrency. At the Bitcoin 2019 conference in San Francisco, there were even spokespersons speculating that the Libra project might be able to save Bitcoin.
Recently, Spencer Bogart of Blockchain Capital also talked about the volatility of Bitcoin when he was interviewed by Bloomberg. He believed that Bitcoin is still a new asset. In the case of fixed supply and floating demand, this kind of fluctuation is very normal.
How is the currency of the altcoin?
Although the altcoins also closely followed Bitcoin at the beginning of the year, the volatility of the cryptocurrency market was higher than that of the world's first and the world's hottest bitcoin. However, that being said, the recent price of Bitcoin has been ridiculous, and the altcoin money has been left behind, but the volatility of the altcoin does not seem as high as bitcoin.
In fact, Coin Metrics data shows that Ethereum (ETH)'s 60-day daily return volatility is currently lower than Bitcoin, which is the first time since April 2018.
As a "banknote" that is globally circulated and has nothing to do with politics, the current development of Bitcoin is still in its early stages, and its long-term price is much more important than the short-term trend. With the increase in the value and liquidity of Bitcoin, it will theoretically become a more useful medium of trading, because it will be difficult for large individuals to shake their prices through a simple transaction.
At least the current bitcoin holders can still accept such fluctuations, as long as the fluctuations are pushing the price up.