Has Bitcoin Become a True Currency?
Frank on Market Insights | 
AS THE GLOBAL MARKETS HAVE SEEN VOLATILITY EXPLODE IN RECENT WEEKS, THE EXTREME PRICE ACTION IN BITCOIN HAS ALL BUT VANISHED. Think about this, since 10/16/18, the S&P 500 (SPX) has experienced seven +/- moves of least one percent. Over that same time frame, BTC has seen just one on 10/29…
In 2017, the SPX saw eight 1% moves ALL year – or 3% of the time.
BTC? In 2017, the leading Crypto experienced absolute moves of least one percent over 80% of the time…
Or we can think about it like this: BTC’s chart formation has become one of the biggest descending triangle patterns we’ve seen in ANY asset class over the last few years. Technical formations this large typically don’t last to completion.
In other words, it’s rare for price action to actually hit the triangle’s apex. We tend to see a breakout or breakdown before this. BTC is just about at its apex now. Does anyone expect a massive break – in either direction – at this stage?
The gripe about BTC BEFORE 2018 was its extreme volatility. Pundits routinely stated that for BTC to become a trustworthy medium of exchange, its price action needed to stabilize. Its wild moves made it challenging for consumers and vendors alike. It’s stabilized alright.
So, where’s that argument now? It’s gone, but now complaints about its non-movement have surfaced instead.
The point is that Crypto remains in the early stages. We’ll continue see periods of volatility and also times when the price action is static. But one thing is clear – BTC is not correlated with any other asset class. And for that reason alone, we shouldn’t ignore it. It may become a trustworthy medium of exchange after all.
