Cryptocurrency could be on the verge of another bull run with the Bitcoin price having held steady around the $8,000 mark in recent weeks, according to the CEO of financial advisory organisation deVere Group, Nigel Green.
“Ditching its trademark volatility, Bitcoin has been stuck in no-man’s land for over a week oscillating within a $600 range,” Green said. “But the price of the world’s largest cryptocurrency surged to the upside on Wednesday and cleared the key $8,000 resistance level.”
According to Green, the recent stabilisation of the Bitcoin price – notorious for its wild swings – is a good indication that prices are about to surge. Historic data shows that periods of low volatility in the crypto market are often followed by “extended crypto bull runs”.
Bitcoin experiences a similar period of stability at the start of the year, with the price sticking between $3,500 and $4,000 from January through to March. However, by the end of May the Bitcoin price had briefly climbed above $9,000.
According to Green, it isn’t just Bitcoin that will benefit, with the wider crypto market also likely to rally too.
Sign of a maturing market
While volatility is often welcomed by traders and investors due to the often quick and easy rewards that it can provide, Green believes traders should expect the crypto market’s reduction in volatility to continue.
“Volatility is typically welcomed by traders and investors as it can present important buying opportunities and bring positive rewards,” Green explained. “However, I think moving forward, we are likely to see less extreme volatility.”
According to Green, this is a sign that the cryptocurrency market is finally maturing – an “essential” shift if cryptocurrencies are going to deliver on their promise of replacing traditional currencies.
“Lower volatility is a sign of the maturation of the cryptocurrency market,” Green explained. “Although volatility will return again, as it does in all financial markets, I think we’re experiencing a fundamental shift and, overall, the crypto market will have less turbulent bouts in the future.
“This is essential for the cryptocurrency sector long-term as it will further encourage mass adoption and institutional investment.”
Last year, the CFO of leading online payment platform PayPal claimed that the company had seen little interest in mass adoption of cryptocurrencies like Bitcoin. Despite giving merchants the ability to accept cryptocurrency payments through PayPal, turbulent prices meant that most were unwilling to offer it as a payment option.
However, we are beginning to see signs of this changing, with cryptocurrency becoming more widely accepted. SL Benfica, for example, is set to become the first football club to accept crypto payments for ticket and merchandise purchases from next season. Likewise, social media giant Facebook also plans to launch its own cryptocurrency, GlobalCoin, which will become the core payment technology on the company’s online platforms.
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