The market on cryptocurrency has been quite crazy for some time, with many investors deciding to come in after seeing the large amount of publicity. A new report has come out showing how the interrelatedness of the cryptocurrency market ensures that there is uniformity in the massive price swings across the board. The report states that “In the last 30 days, which include a spectacular decline in the dollar price of Bitcoin, the correlations haven’t been so reliable.
In some cases, they appear to have broken down. I don’t think that’s an accident. Apart from relatively ignorant speculators, the cryptocurrency-trading community includes people who are genuinely interested in various applications of the blockchain technology and who are making informed bets on its particular flavors.” The correlations across the board are not all uniform however. And some of seen a higher amount of relation in the last 3 months than the earlier times of their existence. Some of the most connected coins include bitcoin being related to IOTA, lite coin and bitcoin cash.
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This makes since given that the two latter coins are offshoots of the bigger coin. The reason that IOTA is in that boat stems from the fact that IOTA was only created to be a better version of bitcoin with many features that bitcoin was unable to offer. The rest of the coins have a high level of correlation to bitcoin, but not as high as the ones mentioned previously. Given that this market is so new, it is difficult to be able to figure out how these levels of correlation will change in the coming months or even weeks. The hopes are high that the market will be able to stabilize to the point at which this relationship will not have as large an effect.