Category Archives: Cboe Global Markets

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Bitcoin Stabilizes As Market Speculation Falls According to Experts

Bitcoin’s stability over the recent months has cryptocurrency commentators agreeing that speculation is leaving the market and giving way to a sense of stability.

With Bitcoin holding its ground since July of this year, many experts are now predicting that the volatility which preceded Bitcoin’s leveling out has little chance of returning, as Bitcoin’s price shifting 5 percent in a day only once in the last month compared to more frequent higher percentage fluctuations in preceding months.

Some argue that this is a sign of Bitcoin “bottoming out,” others predict a bullish run is just around the corner. What most experts do agree on is that stability is good for the market and most likely a result of speculators falling by the wayside as chances of a quick profit on their investment seems unlikely. Bloomberg Intelligence analyst Mike McGlone sees this as the most likely scenario suggesting “High volatility is a major factor lessening most cryptocurrency use cases for anything other than speculation.”

Bitcoin’s price has reached unprecedented levels of stability during the latter half of October 2018, so far at least. After some volatility in the middle of October, the price of Bitcoin has settled into a narrow trading between USD 6,350 and USD 6,500. The daily volatility of Bitcoin fell below USD 100 on 19 October and continues to be below that threshold as of 26 October. This is the first time an entire week has had such low volatility since at least April 2017.

Charlie Morris, multi-asset head at Atlantic House Fund Management in London asserts that the bear market is coming to an end commenting, “It simply means the market is calm and in balance. That implies that speculative interest is low… Given this bear market is now 10 months old and is getting tired, I’d be inclined to be bullish for the next major move.”

Recent CBOE Global Markets data shows that the 20-day historical volatility of Bitcoin has fallen to 31.5 percent, lower than many major companies, including Amazon (35 percent), Netflix (52 percent), Nvidia Corp (4o percent) and Domino’s Pizza (36.2 percent).

Kevin Davitt from CBOE suggests that Bitcoin’s current status could be the flagship’s new standard position and therefore resistant to major change:

“Perhaps we are witnessing the maturation of a market. It’s far too early to declare this the ‘new normal’ but the persistent range over the last few weeks may be hinting at a structural shift. Time will tell.”

Danial Daychopan, chief executive officer of Plutus, suggests this is the after effect of the heady days of  speculation in 2017, and rather than a hangover, Bitcoin’s current stability is more of a leveling out, commenting that “the cost of the emotional traders has been washed away by the recent crash and with it a lot of the volatility.”

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Deutsche Boerse Becomes Second German Stock Exchange Embracing Crypto

Deutsche Boerse, the owner of the Frankfurt Stock Exchange, is evaluating whether to offer cryptocurrency products, according to Bloomberg.

If this is the case, this will be the second German stock exchange to make announcements this year regarding a move towards the adoption of cryptocurrency related products, after Boerse Stuttgart Digital Adventures announced the release of its Bison app in April.

Jeffrey Tellsler, Deutsche Boerse’s head of clients products and core markets, spoke to an industry event in London organized by the Association for Financial Markets in Europe on Wednesday suggesting that the company was “deep at work with it”. Tellsler went on to comment:

“Before we move forward with anything like Bitcoin we want to make sure we understand the underlying transaction which isn’t the easiest thing to do.”

The company’s rivals in the US, Cboe Global Markets Inc and CME Group Inc, became involved in Bitcoin futures last November, and due to regional regulation, no European company had been able to follow suit until this latest move, although he did admit that as yet Boerse Deutsche wasn’t at the same level.

Germany, along with France who is more supportive of ICOs, has been vocal within the EU in supporting blockchain technology and has joined 21 other countries in supporting initiatives with the aim of reinforcing local innovation.

Last June, Deutsche Boerse revealed a plan to move the majority of its post-trade services to a blockchain, using Hyperledger’s open-source Fabric protocol to transfer securities and move commercial bank money.

The firm is clearly moving into the crypto space arena with some urgency, following its announcement in March of a securities lending platform using R3’s Corda blockchain technology. Tellsler explained that before they could proceed, the firm needed to ensure that they understood the volatility of the Bitcoin market, and made sure clients and regulators were in line before moving forward.

In a recent Sowa Labs survey of 1,019 German crypto traders, 16.9% owned a single cryptocurrency, while 18.2% confessed to owning several. Of the respondents, 81% were male, 19% were female, and 54% were 35 years old or younger. More than 80% of respondents opened their first trading account from 2017 onward.

 

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