The Bitcoin price has taken a battering over the past year. But at the same time, its volatility is at a historic low. Will BTC critics finally admit it’s a currency yet?
Crypto markets are making a rebound in January, but there’s no certainty as to whether the bottom is in. Nearly all the major cryptocurrencies are up by double digits on the seven-day chart.
The bitcoin price has soared over 20% to breach the $20,000 level.
Crypto Markets Explode to Start 2023: BTC Surges 23%
Crypto markets seem to be reacting favorably to the latest CPI report. The official US inflation measure saw prices edge down in December, calming global recession fears.
But the explosion of crypto prices has a long way to go before anyone can speak of a steady bitcoin price recovery.
Still, one interesting aspect of this crypto winter is the freeze on Bitcoin price volatility. Even with a blowout crypto price rally, 24-hour Bitcoin price volatility has hardly notched upward.
While a recent report appearing in Yahoo Finance speaks of Bitcoin’s “volatility smile,” the reader should be advised: The volatility smile article refers to crypto derivatives, Bitcoin put and call futures options.
Bitcoin price volatility itself has no wry smile on the charts going into this mid-January weekend. The price remains very stable with a smooth arc as the original gangster crypto trades upward.
Bitcoin Volatility is at a Long-Running Historic Low
Over the long term, Bitcoin volatility has remained very stable at a historic downtrend for over a year. Some pros of volatility are that it often goes with an extended bull run, skilled crypto traders can make profits from it, and that incentivizes liquidity and attracts more capital to crypto.
So volatility is not all bad. However, on the con side, Bitcoin’s critics say it’s not a currency because of its volatility. They argue that it can’t be used as a medium of exchange if it’s worth substantially more or less in the afternoon than it is in the morning.
Well, that’s starting to change, it would seem. Bitcoin price is stabilizing even as it spends some months seeking where to consolidate.
So since the volatility is steadily declining, does that make BTC a currency yet? All the anti-Bitcoin people at Davos or on CNBC keep saying it’s not a currency because it’s too volatile. Who would buy coffee with it?
Now it’s achieving greater daily price stability at a greater scale than ever before. Will any of the naysayers admit that it might shape up to be your household’s daily driver someday? What if it does one of these years before 2030? Will they admit it then (maybe even use it to grab their morning joe)?
This is an opportune time for the question: Is Bitcoin a currency yet?
Because when Bitcoin is in a bull market, its critics say it is too volatile to be a currency. When it is in a bear market, they say it is no inflation hedge. Which one is it to spare the logicians from crypto critics still having their cake and eating it too?