Investors all over the world had credited Bitcoin (BTC) and other digital currencies highly, thanks predominantly to their backing from innovative blockchain technologies and the possibility to work as a viable currency. Market dynamic and investor sentiments have changed substantially however in the past few months; cryptocurrency mania now seems to be cooling down – despite a much higher adaptation than ever before for blockchain technology.
Google Trends, for instance, shows a vast and constant decline of public interest in Bitcoin and other emerging cryptocurrencies. This is mainly due to the massive level of volatility in cryptocurrency markets. The speculation based price movement has also erased trader’s interest.
Bitcoin is Not a Reliable Saving Instrument, Study Shows
The BTC coin rose to an all-time high of $19,000 level at the beginning of the year before crashing to $6,000 on Feb 6. It continued the huge sideways moves in the following months. BTC price moved sharply higher earlier this month to around $9,900 before losing all the gains in last three consecutive weeks.
The study from UK’s Warwick Business School, which is ranked at the first spot in the Financial Times online MBA program in 2018, shows that cryptocurrencies are not reliable saving instruments, even in the short-term.
The demand is driven by past prices, or simple emotion, rather than by economic fundamentals, according to UK’s Warwick Business School findings.
It’s like a Dot-Com Bubble
Several researchers and market analysts are comparing Bitcoin and other digital currencies with the dot-com bubble. The only handful of internet companies had survived when the internet bubble burst in 2000. The study further reveals only a few cryptocurrencies will survive in the long-term, and it is difficult to tell which one would be the next Amazon (NASDAQ: AMZN).
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