New Study: Crypto Market is driving towards financial maturity; will become real competition to Forex market
A recent study by Chaos, an Interdisciplinary Journal of Nonlinear Science, has revealed that the cryptocurrency market could soon become as stable as the stock market.
According to the research paper titled – “Bitcoin market route to maturity? Evidence from return fluctuations, temporal correlations, and multiscaling effects” – various distinguishing trends typically found in oil, bonds, and dollar markets are correlating to trends found in Bitcoin.
The authors of the paper include researchers from the Henryk Niewodniczański Institute of Nuclear Physics of the Polish Academy of Sciences in Kraków. The researchers monitored BTC’s price movement over a period of 6 years, from 2012 to 2018.
Speaking on his findings Lead researcher Prof. Stanislaw Drozdz sated:
“Initially, the graphs we got were a bit crooked, which did not augur anything promising. But when we took a closer look at the data, suddenly it turned out that this crookedness originated from the first two years of the analyzed period, that is, from the time when the market was just starting to shape itself. Later on, the rates of return fluctuated according to the inverse cubic law”. (Cubic Law refers to a method of measuring market maturity.)
Drozdz continued on to state that levels of maturity exhibited from BTC were “particularly evident in the last six months of the examined period”.
“The most important statistical parameters of the Bitcoin market indicate very clearly that for many months now it has met all the important criteria of financial maturity. It seems that in the case of other cryptocurrencies it will be possible to expect a similar transformation. If this happens, the world’s largest market, the Forex market, can look forward to a very real competition.”, Drozdz added.
The volatile nature of cryptocurrencies has been a major hurdle to its widespread adoption. While volatility has impeded its usage for commerce, it has been a very attractive tool for speculators. Now, it seems if Bitcoin and other cryptocurrencies carry on their relatively stable trajectory, they may prove to be a viable financial asset after all…