Cryptocurrency Prices Are Not Due To Any Economic Factors
As per research directed at Warwick Business School cryptocurrency prices are not due to any economic factors but rather exclusively by the assumption of financial investors.
In an article entitled “Cryptocurrencies as an asset class: An empirical assessment” Warwick business school Finance associate Professor Daniele Bianchi said there is no correlation between economic indicators and cryptographic forms of money.
The special study, which considered the week by week exchanging examples of 14 biggest cryptographic forms of money in the period of April 2016 to September 2017, came to the conclusion that the cost was completely affected by past returns and the “hype” of financial specialists and investors as they watch the move of the cost.
Bianchi said: “Looking across the 14 biggest cryptocurrencies the high volatility of their price means that they can hardly be seen as a reliable savings instrument in the short-term, let alone the long or medium term.
“As a result, the market for cryptocurrencies may look similar to the dot.com bubble at the end of the 1990s, and it may be that only a handful of them survive, so for investors it is like choosing who will be today’s Amazon.”
Bianchi mentioned that cryptocurrencies were not like conventional currencies, where the country’s economy influenced the price but instead, had more in common with investing in capital from a high-tech firm.
Bitcoin’s rise has been well registered. The largest cryptocurrency exploded in 2017, rising over 1,500% from below $1,000 to finish the year at $14,156.
This year, notwithstanding, it has confronted various headwinds, for example, the prospect of rising regulation which has driven the price below $10,000. It is presently exchanging at $8,199.
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