After swinging up and down signifying a volatile movement, experts believe that bitcoin might finally be entering the stable, predictive phase where the investors should not expect much of a move under normal market circumstances.
Stricter global regulation has tightened the leash on bitcoin trading volume throughout the world. Unsurprisingly, bitcoin is no longer one of the most searched word on Google, and cryptocurrencies advertisements are steadily vanishing from top websites.
“There is every chance that if there is some sort of institutional involvement, there could be a move higher.”
The field of cryptocurrencies has changed dramatically in the past 12 months. Bitcoin shot up about 25 percent in April after dropping down about 70 percent from a monumental high of nearly $20,000 during late 2017.
It is also observed that the big players in the crypto industry are less likely to chase every moment of bitcoin’s value flow, as they are more vested in the potential of blockchain technology.
According to data compiled by CryptoCompare, the average daily trading volume across exchanges fell to about $9.1 billion in March and to $7.4 billion in the first half of April. Additionally, the cryptocurrency market’s lowest and highest volume days were April 8, 2018 ($4.6 billion) and December 22, 2017 ($30 billion), respectively.
Involvement of Major Financial Institutions Could Reduce Volatility
According to Ruslan Guseynov, Co-founder and Head of Strategy & Development at Soundeon, the low volatility that is characteristic of conventional industries as they mature may not necessarily be true for the cryptocurrency industry:
“Institutional investors’ entrance into cryptocurrency suggests that the market is obtaining a formal structure. Whilst traditionally, a maturing industry is correlated with reduced volatility, it is premature to suggest that this will manifest in the cryptocurrency market in the near or medium term. Crypto-community’s response to institutional investors’ market signals will be most curious to observe.”
From the family-owned Soros Fund Management, Soros has approved his head of investments, Adam Fisher, to “go-ahead” and trade cryptocurrencies. However, according to Bloomberg, the fund has not made any investments yet, nor has disclosed which digital assets are they considering.
Similarly, Rockefeller backed Venrock confirmed a deal with CoinFund and stated that they are “looking to diversify its financial portfolio and have decided that rapidly growing blockchain sector will be a good bet.”