Daily Management Review

Bitcoin May Attain Calm And End Volatility – Making It Boring For Some


12/13/2017




Bitcoin May Attain Calm And End Volatility – Making It Boring For Some
It is an undeniable fact that a stir in the world currency markets has been caused by the cryptocurrency bitcoin – whether one likes it or not.
 
There have been a series of controversial incidents surrounding bitcoin ever since it was invented back in 2009 and such incidents range from hacker attacks and major thefts to bankruptcies and spin-offs, street protests, and outbursts from CEOs on Wall Street and a very, very peculiar car chase in Los Angeles. And then there is the astronomical price surge tat the cryptocurrency has witnesses as it moves towards attaining a value of $20,000 this month.
 
There are many questions that are being asked by potential investors about bitcoin which include how this cryptocurrency works and whether it would be wise to make investment in bitcoin. And even while it is defended by its fans, there are potentially many questions even in the minds of bitcoin fans about the time when there would be a price correction. On the other hand, skeptics of bitcoin do not let go of any chance to scorn on it, and even they potentially would be lamenting that fact that they had not made an investment on it some many years ago.
 
And even as the price of the cryptocurrency piles higher, this financial phenomenon appears to have lesser and lesser practical usage.
 
But with the launch of bitcoin futures, it has now entered the mainstream of the currency market.
 
A significant milestone was reached by bitcoin on Sunday when its future trading was launched at CBOE futures exchange. With this launch, bitcoin has taken a major step towards its legitimization. It signifies that bitcoin has now been taken note of by Wall Street and there are anticipations that this step would bring in large private and corporate investment into the already valuable cryptocurrency.
 
But what many analysts are expecting from this step is the dampening and reduction in the volatility of its price by the anticipated wave of interest in it. Therefore, if such analysts are correct, the enormous ups and owns in its price would come to an end as the cryptocurrency has even undergone a $2000 move in one single day.
 
Therefore, one can expect to see relative calm in the bitcoin market which would be a new aspect for it. Bitcoin could even like to resemble a traditional currency with an end to its volatility and this has potentially made some traders quietly hedging their positions.
 
However, experts expect some problems before the anticipated calm sets in. the machines that are used to trade bitcoin may take significant time – even months to adjust to it – suggested by the two halts on trading on the very first day of the futures trading.
 
"What we are doing is using the sophisticated financial machinery that we have created over the last 15 years and fitted it to something that is highly questionable," Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers, told CNBC on Monday.
 
"And I think that it may look fancy and interesting, but it is reckless," he warned.
 
Buckle up, bitcoin's wild ride could be set for one last hurrah.

(Source:www.cnbc.com)






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