Bitcoin has been in a bear market since nearly the beginning of the year. However, during the last months, Bitcoin’s price experienced less volatility. Although it stills fluctuate, these price differences are much smaller than in other periods.
According to Thejas Nalval, Elements portfolio director, and Kevin Lu, director of quantitative research, that lack of volatility suggests that Bitcoin is being adopted as a store of value.
Bitcoin is Slowly Being Adopted
In order to explain why Bitcoin is experiencing less volatility, Nalval and Lu explain that the market could be moving towards adoption.
On the matter, they explained:
“One can argue that the depressed volatility patterns we’re seeing with bitcoin is the market slowly adopting bitcoin as a SoV (store of value). That’s a fun theory but premature.”
However, they said that they are skeptical about this situation. For them, the market is just simply running out of steam.
“We’re a bit more skeptical,” they wrote. “We think the market has quite simply just run out of juice for now. It’s almost become boring.”
Since August, Bitcoin has traded between $7,400 and $6,000 dollars. But in the last weeks, Bitcoin’s price range tightened. In the last month, Bitcoin was traded between $6,200 and $6,800.
At the moment, Bitcoin is being sold right under $6,490 dollars, according to CoinMarketCap. Its market capitalization is $112 billion dollars. In the last 24 hours, Bitcoin has lost 1.23% of its value.
At the end of 2018, Bitcoin was traded close to $20,000 dollars. In over a month, the most known virtual currency lost over 65% of its value. In short periods of time, Bitcoin’s price experienced sharp movements both up and down. This is why several investors did not want to enter the market.
One of the main complains that Bitcoin receives is that it cannot be considered as a unit of account. As its value is not stable it cannot be used to price different goods and services in the economy. However, Bitcoin can be used as a store of value. In the future, and due to the fact that it has a fixed supply, each Bitcoin would increase in value.
The experts wrote that it seems that investors are waiting on the sidelines to make the first move. Analysts such as Tom Lee and Mike Novogratz remain bullish for the coming months.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.