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Want To Know Where BTC Prices Are Going? Watch USD

Sunday 30th, June 2013 / 08:31

As the bitcoin market continues to mature, with more players entering and liquidity growing to support broader uses, the world’s favorite cryptocurrency is beginning to reflect movements of the USD with an astoundingly high correlation. Bitcoin, a new entrant to the forex world, is just beginning to find its place among the world of alternative assets. Many assume that bitcoin, as a decentralized, non-state issued currency, would gain value as inflationary pressures on traditional currencies increase. If that were the case, it would more closely follow existing inflation hedges, most notably gold, but that has not been the case. As shown in the chart below, BTC’s correlation with gold is not only relatively insignificant, it’s actually been -0.4 since the market settled following the mid-April crash. Bitcoin is known for being a volatile asset, with prices as low as $13 and as high as $260 in 2013 alone, which has led many to declare it unpredictable. As it turns out, not only have bitcoin exchange rates been predictable over the…

The post Want To Know Where BTC Prices Are Going? Watch USD appeared first on The Genesis Block.

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