- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
Stats show things are looking up for the crypto space. However, this in no way means there wouldn’t be a bearish crypto market again. Instead, it means that we might have seen the worst already. If history is anything to go by, then there won’t be a crypto winter that would be worse than that of 2018. Maybe.
But of course, crypto investors and enthusiasts should always be prepared for either red or green changes in the price cycle. Like any other market, including the age-long stock market, price fluctuation is inevitable in the crypto market from time to time. With that in mind, an article by Bloomberg gave some insights into some crypto stats that indicate the next price cycle will be so much better than the last.
Going back to 2009, when Bitcoin was still in its infant stage, Bloomberg highlighted that the price cycle spiked from virtually zero to about $150 in 2013. The swing then came tumbling down by 60% and later regained momentum, bouncing back to an all-new high of $1,150. Just then, it took another fall to $175, falling 85% from its price heights. Completing the circle, the price skyrocketed once more and peaked at the current all-time high of $20,000 recorded in late 2017.
And there came the 2018 crypto winter that pushed the Bitcoin price all the way down to $3,200, losing 85% again. As usual, the digital coin took another lift and achieved a new high of about $9,000 this year; however, it lost some of the momentum, pushing it to the current market price of about $8,100, only to go back up to above $9,000. Indeed, quite a roller coaster.
From the pattern, we can see that, although the price of the most popular virtual coin falls at some point, it never falls below the last ‘high.’ Therefore, if history is anything to go by, we can be quite confident that Bitcoin will not fall below $3,200 – if it falls at all to these low levels. The research by Bloomberg stated that by following the pattern, Bitcoin’s price could go as high as $60,000 to $400,000 before the next crash, which could be as high as the usual 85%.
Notwithstanding, it is essential to note that the variables are likely to change because the crypto market of the past years is not the same as the market today. Today, the cryptocurrency market is so much larger, with hundreds of players in the field. The crypto market, which was capped at $1 billion and $3 billion in 2013 and 2015 respectively, now boasts a whopping value of $260 billion.
This shows that a lot has changed over the years and that it is possible these factors could affect the price cycle trend significantly. While these factors may affect the cycle negatively, it is also critical to note that they hold positive hopes too. So, the crypto space may not be screwed after all.
Bitcoin Now Has Lower Volatility Rate
Another important stat that shows price volatility is so much lower today is the current volatility rate in the crypto market today. In 2017, the volatility was capped at 300%, with volatility investors paying $2,200 for the right to buy Bitcoin at $10,000 when it is actively selling for $8,000. The deal, which is proposed to last for a month, predicts that the price of Bitcoin could go as high as $19,000 or fall as low as $4,000 in a month. This clearly shows how volatile the market was at the time.
But that is not the case anymore. Today, the rate is set at 85%, instead of 300%. This means that investors believe there is a chance of only 15% volatility in the market. The $10,000 price mark could go up to $11,000 or fall down to $7,500. This stat shows that the market has come a long way and the price volatility rate is way lower than what it used to be – but there is still room for volatility.
Again, Bloomberg used the S&P 500 model to analyze volatility in the crypto market and all the results came back looking good.So, I guess it is safe to say that we have seen the worst already. It only gets better for now on.