Stability Of Bitcoin Seems To Be Maturing
The Kracow University of Technology and the Polish Academy of Sciences comes out with great academics every year and now recent researchers from the University has found that Bitcoin is slowly growing into the mature market. They measured the price of Bitcoin using advanced mathematical techniques to identify its movements in comparison to legacy markets.
In their findings, it suggests that despite Bitcoin showing immaturity in the early years of its development, the recent years for the currency have shown that Bitcoin has taken great steps to become a developed market.
âWhile early trading was affected by system-specific irregularities, it is found that over the months preceding April 2018 all these statistical indicators approach the features hallmarking maturity. This can be taken as an indication that the Bitcoin market, and possibly other cryptocurrencies, carry concrete potential of imminently becoming a regular market.â
In the full study by the researchers, demonstrates that in recent months the Bitcoin market has truly become indistinguishable from mature markets due to the most important complexity characteristics.
The study, was published by the American Institute of Physics and is titled âBitcoin market route to maturity? Evidence from return fluctuations, temporal correlations and multiscaling effects featuredâ.
The math behind the study isnât easy to understand, but if you put it simply, the researchers used 1-minute price changes since 2012 to measure things like stability, return distributions, autocorrelation, Hurst exponents and multiscaling effects. Following this, they compare the values to whatâs found in mature markets.
You can look at the first chart here, but as we said, it is quite confusing:
Essentially, trading volume increased and minutes without trading went down suggesting that the price is more reflective of its actual value.
The Hurst Exponent explains how likely the price is to relate to a trend or a stable movement, or as the researchers put it, it âquantifies the relative tendency of a time series either to regress strongly to the mean or to cluster in a direction.â
Furthermore, Bitcoinâs Hurst Exponent has been, over time, moving closer to 0.5 which is a a good sign. The study reported that the Hurst Exponent of big forex pairs has Exponents of 0.48-0.50.
The research wanted the Bitcoin price model to be shown against how a mature market would act. The following patterns as shown on CryptoGlobe model how a bull and bear market would behave in legacy markets. The scientists almost predicted the results.
What are your thoughts? Is Bitcoin starting to mature? Let us know what you think down in the comments below!