Analysts at Barclays see similarities between Bitcoin and the flu, develop pricing models for cryptocurrencies, and take clues from the epidemiological world. Their verdict: Bitcoin may have passed its peak.
The Barclays model divides potential Bitcoin investors into three groups: susceptible, infected and immune. It argues that "infection" spreads by word of mouth as prices go up (no one likes missing out when friends and colleagues make a fortune). Barclays analysts led by Joseph Abate explained in a note to clients on Tuesday:
“ As more and more of the population becomes digital asset holders, the proportion of the population of potential 'hosts' available to become new buyers decreases, while the proportion of the population of potential sellers ('recovery') increases. Ultimately, this leads to price The rise continues, and the coin price starts to fall as the large supply population pushes up the ratio of sellers to buyers. This triggers speculative selling pressure and the price drop is expected to grow exponentially. ”
A similar dynamic plays out with infectious diseases when the so-called immune threshold is reached, the analysts wrote, " a sufficient portion of the population becomes immune so that there are no more secondary infections. "
According to data from Barclays, the main variables that determine whether the price of Bitcoin will rise or fall are people who are aware of the cryptocurrency and the proportion of the population who are willing to invest (vulnerability). Evidence from surveys in advanced economies suggests there are generally very few susceptible people there, the analysts wrote.
Cryptocurrencies were able to bounce back from past price crashes in 2011 and 2013, according to the Barclays Model, but this time the heightened awareness of the signal suggests that Bitcoin may never get back to December's nearly 20,000 level. The peak of the dollar. The virtual currency was trading around $6,700 on Tuesday.
" We think the speculative bubble phase of cryptocurrency investing, perhaps the peak period - may have passed, " the analysts wrote .
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