A major challenge for cryptocurrency's widespread acceptance is its extreme volatility; however, with Bitcoin (BTC) currently displaying remarkable stability, there's renewed optimism for its place in the digital asset landscape.
According to Dow Jones Market Data on bitcoin’s volatility, Bitcoin, the most traded cryptocurrency, displayed the least volatile trading range by a significant margin, contrasting the previously high volatility levels, especially noticeable during the steep market slides in November 2018.
Bitcoin's volatility touched 7.8 percent, a notably tight trading band, especially when compared to its past extreme low of 21.2 percent at the start of 2017.
From October 2013 through October 2018, the average volatility was pegged at 53.7 percent, highlighting the standout progress. With Bitcoin setting this promising record, industry experts see it as a potential harbinger of positive market trends.
Diminished Bitcoin Volatility Could Spark Greater Adoption
Even as skeptics like Nouriel Roubini, who argues against the erratic swings in cryptocurrencies—reaching 100 percent ranges like in 2017—raise concerns, Bitcoin’s recent stability fosters hope. Roubini’s Testimony.
The head of a UK cryptocurrency exchangeCoinCorner, Danny Scott, believes dwindling volatility is good news for the overall interest in crypto.
Though debates are ongoing, Roubini remains steadfast in his criticisms of the crypto market, as evident in his Senate hearing testimony from October.
The testimony titled “Exploring the Cryptocurrency and Blockchain System” casts a critical eye on crypto markets, with Roubini claiming “Crypto is the Mother of All Scams,” while deriding blockchain as overhyped.
Roubini continues to argue that Bitcoin's ferocious price swings—sometimes reaching 30 percent daily—make it a poor store of value and a hindrance to merchant adoption.
Danny Scott trusts that the rise in Bitcoin's stability and subsequent decline in volatility will drive more investments, boosting BTC's adoption.
The Longevity of Bitcoin’s Low Volatility Is in Question
While the news of Bitcoin's latest record brings enthusiasm to crypto followers, Marty Bent of Tales from the Crypt voices skepticism about the sustainability of low volatility, pointing to recent market lulls as indicators of fatigue rather than maturity.
Bent further explains that a decade-old asset like Bitcoin might not achieve seamless scalability and decentralization free from volatility.
Nevertheless, Bent remains optimistic about the market trajectory, suggesting that as the network accumulates value, volatility will naturally stabilize, though this process might span years.
