Wednesday, December 29, 2021

Bitcoin loses its momentum

 After peaking in late 2017, Bitcoin has largely traded sideways. 
Bitcoin against the dollar on a logarithmic scale over the past five years, measuring the acceleration of the cryptocurrency’s move while accounting for its volatility. 
Volatility tied to the presidential election gave Bitcoin a boost, which then sped up as traders embraced risk after the first Covid vaccine arrived in early November 2020. 
For a while, Bitcoin showed a positive correlation with the S&P 500 Index, emerging-market securities and even commodities as a measure of inflation. 
But then, after putting up a 516% return in about six months, its momentum plateaued. In recent months, the cryptocurrency has seen relatively fewer wild swings. 
As the volatility dissipates, some of the gains do too. And that weakness could continue into next year as well whereas bets on a "software development revolution" could fuel other cryptocurrencies.

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