Topic: What Does the Lull in Forex Volatility Mean for Bitcoin? (Read 1974 times)
I just wanted to say thank you to you guys. It's really useful.
The article is correct in saying that Bitcoin prices have been extremely stable this year compared to previous years. The only year that comes even remotely close was 2012 - when the BTC price gradually rose from about $5 near the beginning of the year to about $13 by the end of the year. I wonder what the price will be a couple of months or a year or two from now? If it's still hovering around the $400 to $600 mark then perhaps it means that Bitcoin adoption has reached a plateau and it will forever be relegated to be the "Linux" of currencies.
Oh and for those who are into day trading/swing trading currencies (including Bitcoin), there is still plenty of profit to be made in a sideways market. Those who trade forex should already know this.
Edit: Not to mention a non-volatile Bitcoin exchange rate would also be ideal if we want businesses to accept Bitcoin directly instead of automatically converting it to fiat via a payment processor like BitPay. It would also help Bitcoin gain acceptance in remittance markets. For example, if you wanted to send a sum of money to another country, you would probably prefer to see the value of your funds remain stable instead of fluctuating wildly like Bitcoin did back in 2011 or 2013.
Oh and for those who are into day trading/swing trading currencies (including Bitcoin), there is still plenty of profit to be made in a sideways market. Those who trade forex should already know this.
Edit: Not to mention a non-volatile Bitcoin exchange rate would also be ideal if we want businesses to accept Bitcoin directly instead of automatically converting it to fiat via a payment processor like BitPay. It would also help Bitcoin gain acceptance in remittance markets. For example, if you wanted to send a sum of money to another country, you would probably prefer to see the value of your funds remain stable instead of fluctuating wildly like Bitcoin did back in 2011 or 2013.
The last 12 months have been barren for forex investors hoping for some currency movements they can base trading strategies on.
Volatility has dwindled from healthy levels in mid-2013 down to 25-year lows in May and July this year.
Several reasons have been put forward for what may be the cause of this dry spell, but the overriding causes appear to be the continually low interest rates set by central banks, increased geopolitical risk and return to growth from major economies (keeping risk low in other assets).
Bitcoin’s nature sets it apart from such outside factors as these. A lack of a central regulator (or base in a national bank) keeps bitcoin separate from interest rate movements and economic recovery. The escalation of tension between any of Russia, America, Israel or the Middle East is unlikely to play out in bitcoin markets.
That has resulted in bitcoin enjoying a starkly different 12 months to more traditional currencies, experiencing a swing worth of over $1,000 before levelling out at somewhere around the $550-$650 mark for the past few months – a comparative drop in volatility, but still unstable when compared to other currencies and markets.
As such, the major movements tend to be associated with major developments in the currency itself. Bitcoin’s growth at the end of 2013 was largely down to a Senate committee ruling on its legitimacy, and dwindling in February around the disastrous fall of Mt Gox.
....
http://www.coindesk.com/lull-forex-volatility-mean-bitcoin/
Volatility has dwindled from healthy levels in mid-2013 down to 25-year lows in May and July this year.
Several reasons have been put forward for what may be the cause of this dry spell, but the overriding causes appear to be the continually low interest rates set by central banks, increased geopolitical risk and return to growth from major economies (keeping risk low in other assets).
Bitcoin’s nature sets it apart from such outside factors as these. A lack of a central regulator (or base in a national bank) keeps bitcoin separate from interest rate movements and economic recovery. The escalation of tension between any of Russia, America, Israel or the Middle East is unlikely to play out in bitcoin markets.
That has resulted in bitcoin enjoying a starkly different 12 months to more traditional currencies, experiencing a swing worth of over $1,000 before levelling out at somewhere around the $550-$650 mark for the past few months – a comparative drop in volatility, but still unstable when compared to other currencies and markets.
As such, the major movements tend to be associated with major developments in the currency itself. Bitcoin’s growth at the end of 2013 was largely down to a Senate committee ruling on its legitimacy, and dwindling in February around the disastrous fall of Mt Gox.
....
http://www.coindesk.com/lull-forex-volatility-mean-bitcoin/
Jump to: