The BTC/USD is trading at the $6,000 handle, a third of the peak value in December 2017 but far above the prices of most of last year. Apart from the price swings, other things have happened that indicate to a maturing market.
1) Volatility is lower
The movements in Bitcoin are more extreme than in stocks and certainly than those in fiat currencies. We also see the occasional flash crash. Nevertheless, volatility is lower than it used to be. This may be unexciting for traders looking for the immediate action, but it has a role in making cryptos a more attractive.
A currency with high volatility makes it useless for daily transactions. It is hard to buy a pizza or any other product if the value changes so rapidly.
A more stable exchange rate will make adoption easier.
With the increased adoption of Bitcoin as a means of payment, its value is set to rise. With low volatility, the advance in prices may be slow, but more consistent.
2) Fewer searches – it’s actually good
Data from Google Trends shows that interest in Bitcoin is down to levels last seen around 18 months ago. It is far off the peak seen around the turn of the year. The rapid decline may imply less money flowing into the digital currency.
There is another way of looking at it.
Despite volatility returning to the lowest levels since April 2017, prices are far above that level. The rise and fall still left Bitcoin stronger than it was back then. The cryptocurrency has more support by heavyweights and less support by the broader public.
And once the public gets back in, prices could rise again.
3) ETF interest
Getting the broader audience back into trading cryptos requires facilitating the access to cryptos. Starting a wallet, signing up to exchange, worrying about security, etc. make the process cumbersome for many mainstream investors. Investing in cryptos via an accessible and well-established financial instrument such as an Exchange Traded Fund (ETF) will undoubtedly help.
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