Cryptocurrencies

Bitcoin Sees Stable September, Reaches 17-Month Volatility Low

For a currency known for its rapid price fluctuations, Bitcoin has managed to stay relatively stable in recent weeks. In fact the leading cryptocurrency saw volatility fall to a 17-month low with prices mostly staying between $6,200 and $6,800 over the past eight weeks. As a result some are suggesting that Bitcoin and other cryptocurrencies may be entering a new phase.

Speaking to Bloomberg, DeVere Group founder Nigel Green theorized, “This could be a signal that the cryptocurrency market is maturing.” This hypothesis was more or less dittoed by Bloomberg Intelligence commodity strategist Mike McGlone who said, “This is a maturing market, so volatility should continue to decline.”McGlone added, “When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging and arbitraging.”

While maturity may be a good thing for Bitcoin, it’s current price range is still a far cry from the run-up to nearly $20,000 it experienced last year. Among the many factors that have brought the currency down from that peak include crackdowns from various regulators and other bad news that may have scared off would-be buyers. However Bitcoin’s more modest pricing these days could also be a factor in its recent stability. With some speculators turning their attention (and investment dollars) elsewhere, the wild swings that had become the coin’s calling card may very well be coming to an end — at least for now.

One potential benefit of speculators seemingly stepping away from Bitcoin is that the currency might actually be used as a form of payment and not just a “get rich quick” investment. Although more and more retailers have begun accepting Bitcoin for purchases, the volatility has made it difficult for these merchants to arrive at a proper price for their goods. Furthermore it’s likely that the promise of much higher pricing prevented coin holders from spending their loot. Perhaps if Bitcoin begins performing more predictably, adoption of the decentralized currency it was always meant to be can be spurred.

Following a few bad months for Bitcoin, this potential turning point in price volatility may just prove to be a silver lining for the cryptocurrency.  Of course this doesn’t mean that the prices can’t pick up or that the infamous price swings seen in the last year won’t resume. On that note maybe it’s only fair to say that, even in a time of predictability, Bitcoin is as unpredictable as ever.

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