10/06 ANDY HOFFMAN (CryptoGoldCentral.com): Bitcoin’s Extremely Low Volatility – EXTREMELY Bullish, IMO!
Those who have been in Bitcoin as long as me know it rarely sees a day without at least one major price move – to the upside, downside, or both. To that end, the term FUD emerged as a result of the paralyzing fear caused by sudden, downward plunges – though no such term has been created for the euphoria caused by the equally powerful surges. Perhaps I’ll call it MOSE, or “MOonShot Excitement.”
Despite the price rising from $200 three years ago to $20,000 last December – before settling at today’s “horrible” $6,600 - there have been FAR more “giant red candles” than green ones…the reason being, that as they say in finance, investments “take the escalator up, but the elevator down.”
Bitcoin is a particularly volatile asset – perhaps, one of the most volatile EVER – because not only does it have the potential to change the world…yielding EXTREMELY rich, powerful friends and enemies; but its float is miniscule – as by my estimates, no more than a million or so BTC are potentially available-for-sale at any given time.
Since peaking at $20,000 last December, the amount of giant red candles has been so voluminous, holding Bitcoin has felt like being in a non-stop war zone. This, as its FUNDAMENTALS have inexorably improved – as clearly, we needed to work through the deflation of the December/January bubble, even if it was fundamentally justified.
But all of a sudden – not “uncoincidentally,” as market FEAR arrived, care of surging interest rates and plunging fiat currencies – Bitcoin’s volatility has plunged to its lowest level of the year, with the price seemingly “stuck” around $6,600, and Bitcoin “dominance” around 52%.
There is little precedence for such low volatility in recent years, particularly 2018. However, given all the sector has been through, it’s a welcome development for HODLers– as in the big picture, we’re STILL above last year’s level, as the price didn’t first rise above $5,000 until this very week in October…and $6,000, the next week.
However, over the past 12 months, SegWit has increased from 0% of Bitcoin transactions to, for the first time, 50% last week. And oh yeah, BCash’s “threat” as the “next Bitcoin” has been destroyed – as have all such threats to Bitcoin’s monetary dominance, now and forever. Hash rate has exploded, network security and strength are at all-time highs, network speed is “lightning” fast, and fees are back to negligible levels. Institutional interest is exploding – per yesterday’s “bullish story of the year,” that the Yale Endowment Fund is investing $400 million into a crypto hedge fund; and oh yeah, the increasing imminence of one or more Bitcoin ETF approvals.
In other words, the Bitcoin market – and crypto in general – appears to have exhausted its bearishness. Thus, while naysayers and FUDsters will still try to spin EVERYTHING as bearish, they are speaking to a smaller and smaller crowd of believers. Bitcoin’s low volatility most likely means a BIG upward move is coming…perhaps, MUCH bigger than 2017 – as this time, it won’t be about “price” per se, but global adoption!