The journal referred as “Chaos: An Interdisciplinary Journal of Nonlinear Science” – highlights somefascinating optionsrelating tothequicklyevolving cryptocurrency marketsduring areport titled [Bitcoin market route to maturity?] and lays out a scientific case for why Bitcoincan bea decentinvestment.
The report is authored by researchers at the Henryk Niewodniczanski Institute ofNonlinear Science[IFJ PAN] of the Polish Academy of Sciences inKrakau.
The report explains thatthoughBitcoin and cryptocurrencyarewideviewed as speculative investments that don’t inspirecharitable trust, digital assetsare considered as a much bettertype ofcurrency thanantecedentlythought by analystsalong with thepublic.
Actual PriceOf A Currency Is DecidedBy The Markets
Bitcoin detractorsusuallycommunicatethe claim that digital currency “isn’t backed by anything” in their efforts to discredit it.
However, the researchers note thatasfiatcurrenciesaren’t also nolonger backed by physical commodities either,the actualpriceof a currency iscurrentlydetermined by the waysit’sused and its market history.
An analysis of Bitcoin’s market between 2012 tothe first quarterof 2018 wasdisbursedby researchers, posting all theratingchanges in one-minute sequences. The goal ofthis is oftento search outifthe worthmovementsaresubjected to inversecubiclaw,thatmay be afinancialtheory that usesrating informationto determinemarket maturity.
The theory,thatwas popularizedwithin thelate 90’s by a group of researchers, explains that by plottingseveral price data pointsinformation oftinytime frames, conclusions on the market’s maturitymay becreated,based on the distributionof thosepoints.
While speakingconcerningBitcoin’s [BTC] micro-pricing plots, the researchers noted thatthoughthere wasn’t promisinginformationrelating toa maturing marketat intervals of the primarytwoyears of theanalyzedperiod, itquicklybegan maturingas itgainedpopularity.
Explaining Further, the report added:
“Initially, the graphslookedcrooked,thatdidn’taugursomething promising.howeverafter wetooka more in-depthinspection ofthe information, suddenly itclothedthat this crookedness originated fromthe primary2years of the analysedperiod, that is, from the timeoncethe market wassimplygetting down toformitself. Later on, the rates ofcome backfluctuatedin line withthe inversecubiclaw.”
Through multipledifferentscientificstrategies, the researchers found the crypto markets have begunto point outsomepromising signsof monetarymaturity, with Bitcoin [BTC] mimickingformand multi-fractalsordinarilyseen in mature financial markets,just similar to the stock markets.
“In the case of Bitcoin,we found multifractalitywithin thefunctions of fluctuations in rates ofretuen,notablyevidentwithin thelast six months of the examinedperiod. This was ofa similar typeasfor normal, mature markets,likethe stock, dollar, oil or bond markets.”
Cryptocurrencies Competing Stock Market?
The researchershowever concludedthat Bitcoin [BTC]along with the digital currency marketsmighthave anunbelievablybright futurebased ontheirquicklymaturing fundamentals, even expressing that the crypto marketsmightquicklycompetewith the world’s largest stock market: Forex.
“Thenecessaryparameters of the Bitcoin [BTC] market indicate clearly thatfor severalmonthscurrentlyit’smet all the important criteriaof monetarymaturity. Itappearsthatwithin thecase ofothercryptocurrenciesit’llbeattainableto expectan identical transformation. If this happens, the world’s largest market, the Forex market,willforestallto a real competition.”