Since its beginning, Bitcoin has shown a very unstable nature. Nonetheless, amid a previous couple of days, Bitcoin’s price volatility has tumbled to the most minimal level of 2018. The U.S. Securities and Exchange admission (SEC) will no doubt see Bitcoin’s small price movements more positively.
Low Volatility In Bitcoin Price Means That Investors Are Holding
According to data obtained from Coinmarketcap.com Bitcoin price volatility decreased recently by about 1.7% in the last 30 days and 2.5% in the last 60 days. As in the indicated form, the chart below the price graph becomes a linear line more similar to stable coins.
Government officials and regulators might see this price stability as a positive thing that might mean that price manipulation decreased highly in the last 2 months. Bitcoin ETF SEC approval or disapproval is scheduled late this month. And we have BAKKT approval or disapproval scheduled late in November. Also, potential investors might see Bitcoin price stability more like a store of value like Gold.
Bob Mason FXEmpire specialist said:
“The low volatility is also a statement that price manipulation has perhaps abated.”
Bitcoin price stability shows that speculators are holding Bitcoin and not shorting it anymore.
Manson also said:
“After wild swings and rollercoaster rides, Bitcoin looks to have settled into a long-term relationship with its investors, who are not speculating their days away and appear to be in it for the long haul.”
On the other side traders like the price volatility and are attracted more form market sharp movements as it is an opportunity for quick profits which in the same time increases the risk to lose.
Bitcoin Price High Volatility (Manipulation) A Concern For Regulators
Bitcoin wild price movements may have been the main reason for the rejection of ETP applications. In such manner, the SEC has expressed that it doesn’t trust that Bitcoin and Bitcoin markets are immune to price control by manipulators.
For instance, the SEC report clarifying its second dismissal of the Winklevoss Bitcoin Trust appeal to exchange the first Bitcoin ETF alludes to an analyst who noticed that brokers could control and manipulate the price on their trading platform the Gemini because of low exchanging volumes, including:
“The Trust’s documentation states that momentum pricing of bitcoin has resulted, and may continue to result, in speculation regarding future appreciation in the value of bitcoin, making the price of bitcoin more volatile.”
Officials additionally observed Bitcoin’s high instability as malignant. In July 2018, both the heads of both the SEC and Commodity Future Trading Commission needed to go to a Senate Banking board of trustees hearing to clarify the dangers presented by Bitcoin and other digital currencies’ instability.
At the hearing, the controllers conditioned down congressman’s worries over the digital currency’s “outrageous instability.”
According to Fortune, SEC Chairman Jay Clayton stated:
“Just recently the volatility in Bitcoin was not as great as the volatility we’ve seen in other securities, such as the VIX product.”
When the price hit $20,000 in December 2017 there was a big flow of new money in bitcoin from individual investors. Recently many reports indicate the entry of institutional money in cryptocurrency. Usually, smart money does not pump the prices. Institutional investors are using OTC markets to buy cryptocurrency which is not affecting the stability of price we have seen in the last two months.
Do you believe Bitcoin’s low volatility reported recently is a good or a bad thing? Feel free to post your opinion in the comments below.