Price of Bitcoin being volatile is something that is expected from cryptocurrencies. In 2017, Bitcoin started from $1,000 only to go up to near $20,000. By 2018, the crypto market dropped in value after regulatory changes happened. There was even a time when Bitcoin was trading just around $5,700. But no matter what the price of Bitcoin is, it was always volatile. However, it seems that things are slowly changing.
In contrast to earlier this year, according to US-based asset manager Blockforce Capital, Bitcoin’s volatility has fallen sharply. According to Eric Ervin who works as the CEO of Blockforce Capital, “Both BTC volatility and spread between high and low prices at 30 min intervals are at year-to-date lows”. In addition to this, he also said that “volatility has been trending downwards since the middle of September, with the average volatility reading today (0.404) being the lowest its been all year”.
An Impending Bull Run?
Many are saying that institutional investors participating in the market could trigger not only a bull run but also a more stable Bitcoin. Abu Dhabi’s Financial Services Regulatory Authority head Richard Teng mentioned during the Fintech Abu Dhabi that “Once you bring them (institutions) into the market, you will see the prices become much less volatile, but institutions only come in if you help them address the risks”.
And for this reason, Teng believes that it is imperative that the market is regulated. It is important that the crypto market is a safe investment environment for institutions to participate.
Could it really mean that institutional investors are now involved in causing a more stable cryptocurrency? And also, could it be that we are about to see Bitcoin go up once again?
Wait and See?
Joe DiPasquale, the CEO of crypto fund of hedge funds BitBull Capital, he thinks that it is mainly the failure to experience a “drastic change in volume” that caused Bitcoin to remain more stable these days. He also added that “traders are in a ‘wait and see’ mode”. And he isn’t actually alone in this observation.
Tim Ennking who is the managing director of cryptocurrency fund manager Digital Capital Management also thinks the same. He stated that “We’re definitely in ‘wait and see’ mode”. He added that “There has been more volatility in the alts, but it’s still lower than usual (based on this year)—recent big jumps in XRP and BCH aside”.
Could they be correct in their observation that many are observing what to do next with cryptocurrencies? The US SEC is yet to approve a Bitcoin ETF. According to the agency, the reason that they rejected the more recent applications is due to the possibility of price manipulation.
Many believe that a Bitcoin ETF could actually change the game. In fact, Cameron and Tyler Winklevoss even attempted to submit their Bitcoin ETF application twice only to be denied on both occasions. A Bitcoin ETF could make it easier for institutional investors to participate in the market. And given this possibility, there is a chance that Bitcoin is going to go back up.