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As Bitcoin surges over US$40,000, one chart reveals how immature the crypto industry still is
It will mature with the decline of Bitcoin
BTC made headlines after a sudden jump from over US$34,000 to over US$40,000 yesterday, settling at around US$37,500, over 18 per cent higher than a week ago.
That in itself isn’t anything new or extraordinary, of course. As a matter of fact, what I am writing here isn’t going to be surprising to many — but, as a resident, cautious crypto skeptic, I think it’s also not something that is given much mainstream publicity, particularly in the current environment.
Despite the fact that we currently have more tools, apps, wallets, more sophisticated exchanges and even more cryptocurrencies than just a few years ago, the simple reality is that the entire market is maturing quite slowly.
In many ways, it is just like it was during the rally of 2017/18. Technological sophistication isn’t followed by functional sophistication, at least not on a sufficiently large scale thus far.
And there is one simple metric to show it: cross-currency correlation.
As you can see, over the past month (it’s similar over a day and seven days) the strongest positive correlation is seen with Bitcoin — mostly 70 per cent to over 80 per cent of the time, other coins will follow the leader.
But more interestingly, pretty much all crypto coins are moving in tandem more than 50 per cent of the time, even in most exotic pairs…
What does it tell us exactly? Read the full article on the Vulcan Post (free of charge :))