The numbers behind the biggest cryptocurrency networks, such as Bitcoin and Ethereum, show a different story than that told by price sentiment.
Fear dominates the Bitcoin and crypto markets, but growth and adoption continues unabated.
According to the Crypto Fear & Greed Index, which gauges the general market sentiment by analyzing and aggregating multiple data points into a single number on a scale of 0 to 100, whereby 0 signifies extreme fear and 100 extreme greed, the prevailing sentiment of the crypto markets in the past six months has been mostly “fearful” — continually oscillating in the range of 20 and 40.
Judging by the available data, the community’s overwhelmingly negative outlook on the industry seems largely irrational — almost as if the bearish sentiment is entirely effectuated by unmet, unrealistic expectations and repressed feelings of grief for the (what now seems unattainable) all-time high.
The negative outlook seems unjustified because, despite the downturn in Q2 of 2019, most of the large-cap crypto-assets actually finished the year significantly up in terms of price. Bitcoin’s price, for example, increased by 90% by the end of the year, while Ethereum is down only 6%.
Price Doesn’t Tell The Whole Story
The latest research recently published by Coin Metrics paints an entirely different picture of the state of crypto than the one inferred by the price charts or the fear and greed index.
Volatility, which has traditionally been pointed out as one of crypto’s biggest downsides, is declining across the board. At the end of 2019, the 30-day volatility (the measure of the 30-day standard deviation of log daily returns) was 2.6% for Bitcoin and 3.3% for Ethereum. Read More...