Bitcoin’s Future: Less Volatility, More Stability?
Note: This post may contain affiliate links, and we may earn a commission (with No additional cost for you) if you make a purchase via our link. See our disclosure for more info. The crypto world is constantly changing. This content is for informational purposes only and not financial, legal, or professional advice So, please verify the info on the cryptocurrency provider’s websites.
Bloomberg analyst Eric Balchunas predicts a shift in Bitcoin's price behavior, moving away from the dramatic price swings of the past. The recent surge in Bitcoin's price, fueled in part by the launch of BlackRock's spot Bitcoin ETF (IBIT), which now boasts over $100 billion in assets under management, is cited as evidence. Balchunas argues that the influx of institutional investment through ETFs and large corporations is smoothing out price volatility, reducing the likelihood of significant drawdowns. This increased stability, he suggests, will make Bitcoin more suitable for everyday transactions, paving the way for wider adoption as a currency. Citigroup's analysis further supports this, estimating that every $1 billion in ETF inflows could lift Bitcoin's price by approximately 3.6%, potentially pushing it to $199,000 by the end of the year, assuming sustained institutional investment. However, a potential downside is identified: the departure of some early Bitcoin investors, or ‘whales', who may move their trading activity to less regulated markets in search of higher volatility and profit opportunities. This shift could concentrate risk in less transparent areas of the crypto market. While the era of extreme price spikes and drops may be waning, Balchunas doesn't anticipate their complete disappearance; rather, he suggests a reduction in frequency. The overall trend points toward a more mature and stable Bitcoin market, although this stability comes at the cost of reduced excitement for day traders who thrive on high-volatility trades. The balance between stability and the potential for high returns remains a key consideration for investors navigating this evolving market.
(Source: https://www.newsbtc.com/news/bitcoin/bitcoins-parabolic-glory-days-may-be-over-analyst-claims/)
