Since cryptocurrencies across the world faced quite a volatile jolt the previous week, most hopes of pension funds piling into bitcoin has gone down the drain. This is because a pick-up solely remains in the institutional interest of the speculators.
As it is very well known, Bitcoin is the most actively-traded cryptocurrency across the world. But it has already gone through its most turbulent period ever since the world economy deteriorated last March. On Monday, it was trading $10,000 just a touch below $42,000- which it had reached a few days back. But then it steadied itself at a healthy $35.000.
Why Are Traders Worried About Bitcoin Fluctuations?
These ructions have cropped up roughly after a year of Bitcoin turning out to be one of the most valuable assets on Earth. The blistering run of this currency, nevertheless, has prompted tensions about a bubble brewing. But it has also brought forth several groups of private and hedge fund investors to check it up.
This storm has certainly received major help from the big names that have continuously dripped down. However, the Bank of America did ask its investors and clients if Bitcoin was slowly settling itself into the mother of all bubbles.
Skew, a data provider for Cryptocurrency has maintained that most of the options markets where traders would be allowed to hedge or bet against the fluctuations in price have been sending signals. These signals are reminiscent of the ones that were sent before the rate collapsed to below $4,000. Most of the investors’ expectations about the price in the near-term have also been at the extremes. This suggests that the exchange rate is somewhere swinging between 10%.
UBS Asset Management mentioned that cryptocurrencies like Bitcoin might be attractive due to high volatile rates, but they are definitely not good alternatives to safe-haven assets.