Is There a True Volatility Index for #Bitcoin?
Is There a True
Volatility Index for #Bitcoin?
Bitcoin
just rose over $8,000 in the last 24 hours. If you compare it to exactly 3
months ago, On February 27th, the roof was at $3,832.26. Considered a low
price, and stuck on the wobbly statistic that the month of February is always a
good month for cryptocurrency, in this case BTC, growth was expected in all
fronts.
Already
Bitcoin is going down after hitting a price of $8,840.00 per unit during the
weekend. When it comes to crypto, there’s always a boom that can plunge the
price or skyrocket it. The secret for obtaining the best ROI possible is
strategy, gut, and of course experience.
Read this in full
at https://www.investorideas.com/news/2019/cryptocurrency/05282Bitcoin-Volatility.asp
I
foresee BTC going down in price again, not as low as $3,000 like in February
and not as high as in this very moment. Predicting that it will go down to a
price between $6,500-$7,000 range the question will remains; is there a valid
technique to measure and control bitcoin volatility?
Bitcoin
is measured in traditional markets by the CBOE Volatility Index (VIX). There is
no standard index since cryptocurrency as an asset class is still in its
newborn stages. We have already known that Bitcoin is capable of volatility in
the form of 10X changes in price versus the U.S. dollar, in a timeframe.
There
are several causes for cryptocurrency to go bearish or bullyish:
Whenever
geopolitical events and statements by governments that bitcoin is likely to be
regulated. Conflictive or questionable events bring in a bad reputation, though
nowadays positive investors see this as market maturing.
The
perceptions of the intrinsic value of the cryptocurrency as a store value and
method of value transfer. While bitcoin is limited to a fixed amount production
of 21 million BTC, governments continuously adjust their currency for its
economies and societies health.
The
uncertainty of Bitcoin’s future value: Bitcoin volatility is also driven in
large part by varying perceptions of the intrinsic value of the cryptocurrency
as a store of value and method of value transfer.
Bitcoin
volatility is also driven by the amount of crypto. Holders of large proportions
of the total outstanding float of the currency. The currency has yet to hit the
mass market adoption rates that would be necessary to provide option value to
large holders of the currency.
Bitcoin
is affected by the possibility of a security breach. It scares potential
investors and the very owners of crypto. The cryptocurrency community often
diminishes by assuming the responsibilities of developing new and better coded
solutions. This gives the market certain confidence.
Countries
with high inflation rates may choose to use crypto, or BTC as their coin’s
volatility is higher than Bitcoin’s. This would make the adoption of Bitcoin a
lower risk investment and a higher ROI instrument.
The
IRS recently announced that the currency is actually an asset for tax purposes
had mixed effects on volatility. Any acceptance towards cryptocurrency is a
favorable, yet this statement by the IRS makes bitcoin an asset that has to be
declared. The negative effect could be a slower adoption of cryptocurrency by potential
investors.
Bitcoin
represents an opportunity that has never been proposed before, new
opportunities and implementation arise constantly as the market develops
further. BTC has still to convert all the skeptics for the rate of adoption to
rise.
Acknowledgements
such as the one made recently by the IRS has clarified the situation for
investors, the apparent frictionless value transfer suggests that new use cases
in foreign investment will happen.
This
past weekend’s Bitcoin rise in value can most certainly be a direct consequence
due to “word of mouth” or the investor’s
perception of the ability gateways to safeguard individual holdings and provide
for a reliable store of value as adoption increases.
Bullyish or
bearish? Volatile or stable?
Just
as bitcoin rose sky high these last days, and as it will definitely fall in some way sooner or
later, only to rise again market adoption will ultimately be bitcoins one true
real Volatility Index.
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