Leading experts have given a striking warning about BTC
5 months ago
While Bitcoin (BTC) has been stagnant for a long time, leading experts have issued a striking warning about BTC.
At first glance, it may seem like a positive development that Bitcoin is becoming less volatile than stocks. But experts warn that this may not be a good development in a low-volume environment. According to journalist and analyst Noelle Acheson, Bitcoin's 30-day volatility has "fallen hard" in recent days. According to data from analytics firm Coin Metrics, the critical metric is now around 52% after spending the past month over 64% year-on-year. Meanwhile, Jake Gordon of Bespoke Investment Group notes that a volatility indicator called BitVol is approaching its lowest levels since spring. The index was at 111 in May and is currently hovering just above 69. However, the trading volume also fell. According to data from CoinMarketCap, that figure is currently hovering around $47 billion, up from more than $100 billion at the beginning of the year. For example, while low volatility in the stock market is typically welcomed, this could spell trouble for Bitcoin, where there are many speculators on the market. “Low volatility in Bitcoin may not be a good development, especially if it is low volume,” Yassine Elmandjra, an analyst at ARK Investment Management, told Bloomberg TV on Tuesday. said. Elmandjra referred to the unexpected drop to $3,000 in such an environment at the end of 2018, when Bitcoin was trading around $6,000, and made the following statement: Why is it a Dangerous Situation?
The cryptocurrency market has been hit hard this year as the Federal Reserve and other central banks aggressively raise interest rates to curb inflation. This has driven many investors – especially new entrants in the last few years – out of the market. Individual investors, in particular, almost escaped from the market. Meanwhile, institutions have become major players lately, potentially helping to explain why volatility has plummeted. “Macroeconomic conditions are really affecting us, as they are affecting all other asset classes,” Tim Grant, head of Galaxy Digital EMEA, told Bloomberg TV this week.