Bitcoin traders see price volatility continuing

Admire Moyo
By Admire Moyo
Johannesburg, 21 Feb 2022

One in five (22%) surveyed Bitcoin traders who trade at least $1 000 a month in the crypto-currency expect the level of volatility in the price of Bitcoin to increase dramatically in 2022.

This is according to a research done by GNY, a blockchain and machine learning firm, which notes that a further 57% say it will increase slightly. Only 18% expect it to fall or stay the same, says the firm.

GNY commissioned research company Pureprofile to survey 100 Bitcoin traders who trade at least $1 000 a month in the crypto-currency.

The report comes as the price of crypto-currencies fell sharply on Friday, with losses outpacing those in other risk-sensitive markets, as geopolitical tensions stemming from the Russia-Ukraine crisis kept investors on edge.

Data from Cointelegraph Markets Pro and TradingView also shows Bitcoin losing ground on Sunday, following threats of fresh sanctions on Russia over its alleged plans to invade neighbouring Ukraine.

At the time of writing, Bitcoin, which is the world’s most valuable crypto-currency, was trading at about $39 300 (R595 000).

Last year, Bitcoin reached an all-time high of $68 521 on 5 November.

ITWeb recently reported that local crypto-currency exchanges are expecting the price volatility of Bitcoin to persist this year.

According to GNY, the two main reasons for an increase in price volatility identified by those traders interviewed was Bitcoin whales – they hold large proportions of the total outstanding float of Bitcoin, and are expected to increase their holdings and become more influential.

This is the view of 49% of those surveyed. The same number said increased developments around the tax treatment of Bitcoin and other crypto-currencies in 2022 will lead to a rise in volatility.

Some 38% said they expect more security breaches and more being openly disclosed, while 38% said volatility will also be fuelled by more big companies buying Bitcoin and talking about their holdings.

Nearly one in three (29%) said they expect more regulatory news from around the world to increase price volatility in crypto-currencies in 2022.

Cosmas Wong, CEO GNY, says: “2021 saw some huge fluctuations in the price of Bitcoin and other crypto-currencies, and our study suggests 2022 will see a rise in levels of volatility. This presents a huge opportunity for traders to improve their returns, but they are also at greater risk of suffering losses. They need to make more use of trading tools that, for example, help predict future price movements.”