The aspect of volatility has marred the reputation of the crypto world since its large-scale eruption. One day the market is seen going up with different cryptos showing major greens and the very next day, it is down in on its knees again. Many people have gained and lost a lot of money owing to the sudden spikes and jumps that are shown by the world of cryptos.
At the time of writing, bitcoin stands at around $3,870, as per www.coinmarketcap. The asset has gained this low position after showing major drops in the month of November. In October, the asset showed stability for quite some time lingering around in the range of $6,000s. The asset stayed in this range for days as it gained praise and trust from the general public regarding its much-improved volatility.
But just as it felt that the asset was showing signs of maturity, it went in the downward direction. From the $6K range, the asset dropped to $5Ks and then to $4Ks. Now, for quite some time, the asset is looming around the $4K mark. So, where are we headed from here on? In order to get an insight on this, BlockPublisher got in touch with Thomas Power, a well-renowned crypto & blockchain personality, who is also the board member at BICRA, short for Blockchain Industry Compliance and Regulation Association. Thomas suggested that from here on, we might be moving towards the $2,500 mark. Talking about the reason why this might happen, he stated:
Falling hashrate helps major miners merge and consolidate their capital and cost base.
Adding on to his statements, Thomas stated:
Easier for big miners if hashrate slows and falls remember. Fewer rivals makes big fish consolidate and win.
As suggested by Thomas, we might be in for a further drop from here on. Now, this might come off as a bad news for the people who have already invested in this asset. Previously, the asset resulted in major losses for people owing to the sudden drops.
The drop in price is also not good for the overall image of this asset in the media. Now, the trust among the community might tremble even further because last year in December, the asset was almost touching the $20,000 mark, and now, it is at a price very very low than that. If this asset is to gain acceptance and adoption, it needs to show that it is mature and stable. Price instability often holds people back from using this asset as a source of making payments. The issue of volatility is one of the reasons why an exchange-traded fund (ETF) has not been approved the United States Securities and Exchange Commission (SEC) yet.
If this asset is to grow, mature and gain public acceptance as a currency, it needs to tackle this issue of volatility as soon as possible.