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Research: Bitcoin as Stable as “Dollar and Oil”, Cites Cubic Law

New research published in a respected Journal of Nonlinear Science, suggests that cryptocurrencies could soon be as reliable as fiat currency.

Chaos has released a research report titled “Bitcoin market route to maturity?” which maintains that due to the maturing of digital assets over time, many commentators view that Bitcoin and similar cryptocurrencies are volatile, and therefore too unstable to be used as a currency, are largely unfounded.

The basis of many of these commentaries about Bitcoin’s instability stems from the massive price fluctuations of the past year, seeing the flagship cryptocurrency reach a high of almost $20K in December of 2017 only to drop to $6000 in June of 2018.

The report cites influences, not unlike those which effect regular fiat markets, as instrumental in some of the fluctuating fortunes of digital currencies, such as temporal correlations as multi-scaling effects. The authors of the study commented on the Bitcoin movement over time after studying a number of graphic representations:

“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 analysed period, that is, from the time when the market was just starting to shape itself.” Adding, “Later on, the rates of return fluctuated according to the inverse cubic law.”

Cubic law is a system of judging a market’s maturity where financial analysts plot price changes in one-minute sequences and compare how they match up.

They added that Bitcoin’s maturity was “particularly evident in the last six months of the examined period,” suggesting that the digital currency’s fluctuations corresponded in the same way as rates of return as regular, mature markets, such as the stock, dollar, oil or bond markets; all good news for Bitcoin enthusiasts and cryptocurrency investors in general.

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