Cryptocurrencies are on their way to “explosive volatility”, predicts a new report by Arcane Research.
According to analyst Vetle Lunde, the worst is not quite over and cryptocurrencies will continue to swing rapidly in terms of price valuation over the coming months.
In fact, Lunde argues that the volatility is going to get much worse, sending further ripples across the sector, but this won’t mean an end to the sector.
While some have hoped that cryptocurrencies will remain robust over the coming months, Arcane Research has seen enough indicators to suggest that the current interest in the sector is not enough to prevent short-to-medium term volatility.
One thing that the market can benefit from is sophisticated traders who are able to plan and direct their investment and set examples for others.
Open Interest in crypto derivatives can also be a contributing factor to the overall volatility that the markets experience in the mid-term, the analyst noted.
Despite this volatility, Arcane Research remains fairly confident about the long-term prospects of the industry and what the future of Bitcoin (BTC) could be.
Lunde said that he was confident that BTC will remain a good choice for people who want to invest into cryptocurrencies and keep their investment over a long period of time.
Another reason for the long-term success of crypto could be the fact that NASDAQ-listed companies are moving into the sector even if people like Jamie Dimon still remain fairly opposed to cryptocurrencies.
Given the current interest though, and despite the predicted volatility, Lunde argues that this interest in the sector will remain sustained.
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