Bitcoin price? Emotions weigh more than economic indicators. Here's what a recent study by a financial researcher supports.
Il Bitcoin price? Just as it happens with Ethereum e other cryptocurrencies, is determined more by investor mood than by any economic indicator.
To affirm it is Daniele Bianchi, assistant professor of finance at Warwick Business School, who found that the pricing patterns of the 14 largest cryptocurrencies reflect past investor returns, combined with the excitement and emotion experienced while watching the value rise or fall.
"There is research showing limited similarities between Bitcoin and gold, but looking at the high volatility of the price of the 14 major cryptocurrencies, we note that they can hardly be seen as a reliable short-term savings tool, not to mention the long or medium term. "- said Bianchi in his paper entitled Cryptocurrencies as Asset Class: An Empirical Assessment.
This behavior can be attributed to the fact that Bitcoin and other cryptocurrencies do not fall under the competences of governments or financial institutions. Investing in digital currencies is therefore more akin to buying shares in a high-tech firm than to a normal currency, the study suggests. In this regard, Bianchi then recalled how the current market of cryptocurrency it is similar to the dot com bubble that occurred between 1997 and 2001, which saw excessive speculation on web companies by investors, eventually leading to the collapse of many of the same companies.
“Most of these cryptocurrency are born through unregulated mass sales similar to IPOs, the so-called Initial Coin Offering"- added Bianchi -" As a result, the cryptocurrency market may seem similar to the dot-com bubble in the late 90s, and it may be that only a handful of them can survive. In short, for investors it is like choosing who will be the Amazon of today ”.
