Bitcoin's price may not be as high as some investors would like, but the volatility of this digital asset is perfect for high-speed traders, the chief executive of a trading company in the UK stated. .
In one interview With The Block on Monday, Max Boonen - founder of B2C2, said Bitcoin's volatility has reached a ripe point for companies that create markets. Such traders sit among investors, giving quotes where market participants can buy Bitcoin. Companies that trade and create markets make money on the spread between buy and sell orders.
Volatility has skyrocketed across all asset classes as fears of coronavirus impact continue to stifle global markets. CBOE's volatility index has increased by 69% over the previous month.
"I think the volatility at the moment is quite Goldilocks," Boonen said. “In my opinion, the volatility we have in the market is very good. Any market maker can make a lot of money. ”
Note: Generally, Goldilocks is a term for moderate growth, neither too fast nor too slow.
Bitcoin's volatility dropped from a peak of over 300% in the middle of the month to 125% on Monday, more than double the level before Bitcoin collapsed on March 12. The higher the 10-day volatility, the more the price of Bitcoin will fluctuate in the same time frame.
"They had a record day on March 13," Boonen said. “Day 12 was a big day, but actually when the market hit around $ 4,000, they reassessed their views. That's where you get the bulk. ”
However, current market conditions are not favorable for everyone, as Skew's Emmanuel Goh noted. Liquidity in the market has been exhausted, as indicated by the number of open contracts on Bitcoin futures markets. When liquidity is exhausted, traders joining and exiting the position will become more difficult.
"The sell-off on March 12 has caused considerable pain for some investors and market makers, we haven't seen the number of open positions open again since then," Goh said. with The Block.
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According to The Block
Translated by ToiYeuBitcoin