According to a study published by the financial conglomerate Morgan Stanley, bitcoin behaves just like the Nasdaq during the dotcom bubble of 20 years ago. Time only now everything is unfolding much faster.
Price movements of the Nasdaq in 2000, and bitcoins in our day in the most “turbulent” periods reached 250-280% before bear market, said in a note to Morgan Stanley clients.
“Only the bitcoin rally was about 15 times faster,” said a strategist at Bank Sheena Shah (Sheena Shah).
According to her, such price movements and this kind of behavior in trading volume can be an indication that history repeats Nasdaq.
Bearish markets for bitcoin in 2009 was observed four times, falling prices of them ranged from 28% to 92%, recalled Shah. The average price of the cryptocurrency lost on each bearish wave 45-50%, which is very similar to the behavior of the Nasdaq 18 years ago.
“In a bear market the Nasdaq in 2000 had five price reductions, surprisingly, on average the same 44%,” — said strategist at Morgan Stanley.
She drew attention to the fact that at every rally before the bear market showed a drop in trading volumes. But bitcoin does this figure in December, in contrast, jumped by 300%, and she sees this as a favorable signal for cryptocurrency.
“The subsequent rally as bitcoin and Nasdaq has always meant a decline in trade. The growth of trading volumes, thus, is not an indication of raised investors ‘ activity, rather, they are in a hurry to leave,” says Shah.
Historically, to buy bitcoin, there were three main currencies: United States dollar (USD), Chinese yuan (CNY) and Japanese yen (JPY). When the last bear market a greater share of trade absorbed the new digital currency, called Tether (USDT).
“Token USDT is not the main financial unit, but its increasing use is an interesting story. We think that in the coming years, the focus in the market may increasingly be displaced in the cross-trades between the crypto currencies/tokens, and these transactions will be distributed only through registers, not through the banking system”, says Sheena Shah.
We will remind that earlier the Commission on trade commodity futures (CFTC) sent the subpoenas to companies Tether and Bitfinex, which are interconnected. The creators USDT assure that all tokens provided in US dollars in relation to one-to-one. But cryptosuite have long expressed fears that the companies, really there is about $2.2 billion of the necessary funds for it.