With cryptocurrencies gaining more recognition and mainstream attention with every passing day, the instinct to view this still nascent sector through the lens of a traditional financial market is quite understandable. Ergo, it’s not a surprise if some expect the latter’s institutionalization, volatility, and yes, predictability, from an emerging industry such as the crypto-market.<\/p>\n
However, are such expectations justified? Just because an emerging sector is going mainstream, can it be expected to act like it as well? Well, when it comes to Bitcoin and the larger crypto-market, the answer is trickier than expected.<\/p>\n
Consider this – Bitcoin, the world\u2019s largest cryptocurrency, was rangebound on the price charts until it wasn\u2019t. Its price charts over the last 2 weeks registered quite a few sharp hikes, sudden falls, and long, long periods of sideways movement.<\/p>\n
How did this come to pass? Well, the traditional answer would be something along the lines of “developments in the ecosystem pushed the price of XYZ.” However, while that would be the simpler explanation, it would also imply that the market adheres to a financial model, that it is expected to react in a certain way when something happens.<\/p>\n
Bitcoin’s recent hikes and falls, therefore, are worth exploring to get some clarity on the subject. It should be noted here that the said instances were also the subject of Arca’s latest market recap<\/a>.<\/p>\n Janet Yellen – Not quite Janet Jackson?<\/strong><\/p>\n Consider this \u2013 Janet Yellen\u2019s remarks about the use of cryptocurrencies for the purpose of terrorism and money laundering spooked a lot of people, and rightly so. But, what the headlines didn\u2019t highlight was the context and the entire text of Yellen\u2019s answer before the Senate Finance Committee.<\/p>\n Yes, Yellen highlighted the use of crypto for illicit activities, but she also said that they have the potential to improve the financial system\u2019s efficiency, while encouraging crypto\u2019s use for “legitimate activities.”<\/p>\n Yellen says cryptocurrencies could improve the US financial system: pic.twitter.com\/L36J6Bn4vx<\/a><\/p>\n — Saleha Mohsin (@SalehaMohsin) January 21, 2021<\/a><\/p><\/blockquote>\n\n