Bitcoin, the crypto currency that is known for its volatility was surprisingly stable this week even as the entire U.S. stock markets saw huge upheavals.
According to data from CoinDesk, as of Friday afternoon, Bitcoin is up 1 percent for the week and has remained steady in the $6,500 range without much change.
At the same time, the equity markets were battered by a storm with an almost 3 per cent drop in the Dow Jones Industrial Average during the week. The index ended 500 points higher on Thursday following a slide a day earlier. It again fell by over 500 points following selling of shares by investors because of some disappointing third quarter reports by some of the most important tech firms in the US. Some of the drop was later recovered by it.
The sell off was also compounded by concerns among investors about the escalating trade war between China and the United States and the sire in interest rates in the US.
However, this insulation from the market trends for bitcoin is relatively new.
There was as much as 1300 points in the Dow Jones earlier in October which was its biggest single day fall since February and this uncertainty also affected crypto currencies. $18 billion was brushed off the total crypto currency market in that rout with the bitcoin falling 6 per cent.
Ever since the high of $20000 for its value which it attained last year when investors were very interested in investing in this asset class, there has been a fall of 65 per cent in the value of the bitcoin. Throughout the year, bit coin has still gained 14 per cent and according to CoinDesk, as on Friday, the value of the crypto currency was near $6,483.
The volatility in the value of bitcoin has rendered it almost impossible to be used as a viable payment method. Rather, the crypto currency has been used by investors as a safe investment and a store for value or what is also known as "digital gold." But even as the value of the coin fell during the year, the concept of using bitcoin as a safe haven for storing value also became doubtful.
In contrast, there was a 0.6 per cent appreciation in the value of gold.
The volatility of bitcoin can be gauged from the fact that it lost 33 percent of its value in one single day in early February as its value fell from $9000 to below $6000 in a matter of just 24 hours. Now however it appears that bitcoin is getting a bit more dependable with lower volatility and less price swings which are far between.
According to data from CoinDesk, in October there has been just one day when bitcoin has lost 5 per cent or more. In comparison, in the months of January and February, there were 8 occasions that bitcoin had such large fluctuations.
Crypto currencies are mostly seen as separate assets from the wider markets, believes Brian Kelly, CEO and founder of BKCM.
"I don't know of anyone saying 'Microsoft dropped, I better sell bitcoin to cover my margin'," Kelly said in a television interview.
(Source:www.cnbc.com)
According to data from CoinDesk, as of Friday afternoon, Bitcoin is up 1 percent for the week and has remained steady in the $6,500 range without much change.
At the same time, the equity markets were battered by a storm with an almost 3 per cent drop in the Dow Jones Industrial Average during the week. The index ended 500 points higher on Thursday following a slide a day earlier. It again fell by over 500 points following selling of shares by investors because of some disappointing third quarter reports by some of the most important tech firms in the US. Some of the drop was later recovered by it.
The sell off was also compounded by concerns among investors about the escalating trade war between China and the United States and the sire in interest rates in the US.
However, this insulation from the market trends for bitcoin is relatively new.
There was as much as 1300 points in the Dow Jones earlier in October which was its biggest single day fall since February and this uncertainty also affected crypto currencies. $18 billion was brushed off the total crypto currency market in that rout with the bitcoin falling 6 per cent.
Ever since the high of $20000 for its value which it attained last year when investors were very interested in investing in this asset class, there has been a fall of 65 per cent in the value of the bitcoin. Throughout the year, bit coin has still gained 14 per cent and according to CoinDesk, as on Friday, the value of the crypto currency was near $6,483.
The volatility in the value of bitcoin has rendered it almost impossible to be used as a viable payment method. Rather, the crypto currency has been used by investors as a safe investment and a store for value or what is also known as "digital gold." But even as the value of the coin fell during the year, the concept of using bitcoin as a safe haven for storing value also became doubtful.
In contrast, there was a 0.6 per cent appreciation in the value of gold.
The volatility of bitcoin can be gauged from the fact that it lost 33 percent of its value in one single day in early February as its value fell from $9000 to below $6000 in a matter of just 24 hours. Now however it appears that bitcoin is getting a bit more dependable with lower volatility and less price swings which are far between.
According to data from CoinDesk, in October there has been just one day when bitcoin has lost 5 per cent or more. In comparison, in the months of January and February, there were 8 occasions that bitcoin had such large fluctuations.
Crypto currencies are mostly seen as separate assets from the wider markets, believes Brian Kelly, CEO and founder of BKCM.
"I don't know of anyone saying 'Microsoft dropped, I better sell bitcoin to cover my margin'," Kelly said in a television interview.
(Source:www.cnbc.com)
