Bitcoin is demonstrating various signs of a currency including decreasing volatility and rising merchant adoption, says popular bitcoin trading and wallet platform Coinbase Vice President Adam White.
During an interview with CNBC in regards to the recent price plunge of bitcoin, White stated that it was essentially a reaffirmation of the Chinese government’s announcement in 2013. Bitcoin exchanges are permitted to operate as long as they live up to industry-wide standards and comply with local regulations.
So far, major bitcoin exchanges such as BTCC and OKCoin have maintained an efficient relationship with the People’s Bank of China and local lawmakers. BTCC, in particular, have led in-depth conversations with government officials over the past week to discuss the business model and operations of the exchange.
“A group of regulators consisting of the SH branch of PBOC, the SH Financial Affairs office & other related govt agencies visited BTCC. During this visit, we followed up on prior discussions and shared details about our business model and operations with the group,” announced BTCC.
However, false speculations and inaccurate coverage of the Chinese bitcoin exchange market led to the further devaluation of bitcoin. To ensure that users and traders understand the actual status of the relationship between Chinese bitcoin exchanges and lawmakers, BTCC and other exchanges released additional statements and cautioned users against instigating news articles.
“In the meantime, we urge our customers to take a rational & cautious view to news articles which speculate on the visit and discussion,” BTCC added.
In spite of the series of statements published by BTCC and other major bitcoin exchanges, investors and traders began to panic after false news articles inappropriately portrayed the Chinese bitcoin market and its connection with the government.
In response, executives of various bitcoin companies including Coinbase VP Adam White appeared on national television to discuss the current situation of the Chinese market and bitcoin’s development as a currency.
In comparison to 2013, rumors surrounding the Chinese bitcoin exchange market had a significantly smaller impact on the price of bitcoin. One major reason behind the difference between four years ago and today is the awareness of bitcoin as a global store of value the general population has already developed.
Over the past 12 months, bitcoin has shown strong signs of a global store of value. In fact, it outperformed every other currencies in 2016 due to its characteristics as a safe haven asset. The price of bitcoin solely depends on the performance of the market and the demand from investors.
On top of its satisfactory performance as a store of value, it continued to demonstrate strong attributes of a currency, from low volatility rate to rising merchant adoption. As the volatility rate of bitcoin began to decrease substantially, an increasing number of merchants began to accept bitcoin as a mean of payment.
Previously, CCN also reported that the number of bitcoin-accepting shops in Japan increased by 4.5x over the past year.
“Bitcoin itself is a relatively volatile asset but what we’ve seen over the last three to five years is the softening of that volatility.” said White. “The volatility of bitcoin from roughly 2015 to present is only about 25% of the volatility of it was once,” he added.
Image Via: CNBC
Last modified: May 21, 2020 10:05 AM