Interest in Bitcoin and Cryptocurrencies has slowed of late. Earlier this year, across social media, every mention of Bitcoin and cryptocurrency garnered a lot of attention. There was a particular emphasis on futures, ETFs and any plans that Wall Street was making to bring crypto more mainstream. That interest has waned, at least partly because prices have stalled, Bitcoin, for example, closed in the U.S. markets on Friday at $6,214 on Friday (according to Bloomberg – I use coindesk for real-time pricing). We are getting to the point that most purchases in the last 12 months will have been made at prices higher than today. Early adopters are still doing well on their early purchases, but very few people who have bought Bitcoin in the last 12 months can say that. That is definitely hampering the ability of Bitcoin to attract new adopters – which remains key to it being able to rise in price.
The other element that is impacting interest in Bitcoin is the fact that it has become less volatile. News attracts attention when volatility is high as people crave information. Bitcoin had a 10-day realized volatility as low as 17 just last week (according to Bloomberg). While still high by most standards, that is well below highs of 176 in January and even well under the 90 hit as recently as July. Bitcoin just isn’t as volatile as it once was.
That lack of interest seems to have changed as @Nouriel seems to have ignited twitter and social media in a way I have not seen in months, if not longer.
Nouriel Roubini has been bashing Bitcoin aggressively with tweets like “Bitcoin must die!”. He is backing up his thoughts with useful and relevant information as well. That has garnered support from all the crypto-bashers. There are many reasons he provides and links to a Princeton University study The Looming Threat of China has added fuel to the fire.
The most interesting part of the response is the way the bitcoin and cryptocurrency community seems to be banding together. Roubini’s comments seem to be galvanizing the disparate parts of crypto into something resembling a cogent response (not exactly coordinated, but still effective). Some of the ‘conversation’ has deteriorated into the usual morass of name calling and unintelligible rebukes, but there are nuggets of real wisdom or thought in there. It is encouraging to see how this develops.
Before anyone out there declares victory for the Bitcoin Bashers, let’s remember a couple of things
- Doctor Doom, at least to my recollection, has been wrong on a lot of markets, in many cases for long periods of time. He was one of many that ‘predicted’ the financial crisis, and that is a claim to fame, but many others saw it, and like anything else timing was crucial for helping investors. That he has chosen this time to up his ante in the war on Bitcoin is interesting. He may be right, but his track record on calling bubbles is not perfect.
- It makes sense that Bitcoin bashers are coming out of the woodwork. It is hard to bash something when it is going up every day or most of the people who have participated are making a lot of money. Market commentary more often than not tends to follow price action rather than lead it. So as Bitcoin has called, it is much easier to be outspoken about its problems.
Keywords: Crypto, Bitcoin, market