Data provided by cryptocurrency trading simulator Crypto Parrot indicates that Bitcoin recorded a daily trading volume of $ 39.1 billion between October 1 and October 11. The trade volume is three times that of the e-commerce giant Amazon, which has a trade volume this month of $ 11.4 billion.
Likewise, this commercial volume is also at least three times higher than the $ 13.6 billion registered by Apple. And also greater than Microsoft’s trade volume of $ 5.9 billion.
This large trading volume for Bitcoin is a strong indicator that investors perked up after staying on the sidelines during September. Source: Crypto Parrot
While the trading volume of Bitcoin has increased considerably. The daily trading volume of traditional stocks is still on the mend, due to the impact of the COVID-19 pandemic. In addition, the fact that the trading volume of the shares lags behind Bitcoin is an indicator that the traditional market is still suffering the impacts of the coronavirus pandemic.
It is worth noting that the trading volume of Bitcoin is significantly higher considering that the cryptocurrency is traded 24 hours a day, 7 days a week. While traditional actions are limited to five days, not including holidays. Furthermore, Bitcoin and tech stocks belong to two totally different asset classes.
Trading volume correlates with the rise in value of Bitcoin, after experiencing high price volatility during September. The trading volume indicates that potentially more investors are getting involved to benefit from the rally.
Is Bitcoin a bubble?
The large trading volume of Bitcoin is impressive. This volume is related to a period in which Bitcoin has reached a new all-time high. Mainly motivated by the adoption of cryptocurrencies by large companies. Thus causing a positive impact on its commercial volume and liquidity.
Historically, Bitcoin’s large trading volumes have been a key indicator of impending price volatility. An increase in trade volume is generally considered an indication of a large movement in prices. This is evident, considering that after its resistance period, Bitcoin continued to rise in price. Reaching new levels despite global regulations.
Also, due to the high trading volume of Bitcoin compared to the aforementioned stocks, it is likely that large investors have been attracted by the appetite for short-term earnings.
However, the president of Europac, Peter Schiff, believes that most buyers of Bitcoin are not aware that “it is a bubble”, and “it is something that will have a consistent result in the end.”
«The only valid reason to buy Bitcoins is to think that the bubble will get much bigger before bursting. Most buyers of Bitcoin do not know that it is a bubble, so they will never sell. But since most of those who do will not be able to know when it appears, they are not likely to make much of a profit either. ” Schiff added.
In contrast, businessman Jeff Booth praised Bitcoin. “Bitcoin could be the greatest invention of recent times, because it allows unprecedented historical changes and, as a result, it allows people to take a giant leap.” Booth affirmed.
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