It is in the nature of Bitcoin not to be influenced by such external influences. The absence of a central regulator keeps Bitcoin away from interest rate fluctuations. It is also very unlikely that the tensions in Russia, America, Israel or the Middle East will affect the Bitcoin in any way.

Volatility shrank from a healthy cryptosoft level in 2013 to a new 25-year low in May and July

Several factors are likely to have caused the cryptosoft market’s prolonged drought. However, the main reasons appear to be the prolonged low interest rates by central banks, growing geographical risks and a slowdown in cryptosoft growth in large nations.

Average volatility USD, EUR, GBP, AUD and JPY. Source: IG forex charts
It is in the nature of Bitcoin not to be influenced by such external influences. The absence of a central regulator keeps Bitcoin away from interest rate fluctuations. It is also very unlikely that the tensions in Russia, America, Israel or the Middle East will affect the Bitcoin in any way.

Bitcoin has experienced many highs and lows in the last 12 months. After a high of over 1,000 USD per Bitcoin, the Bitcoin price has settled somewhere between 550-650 USD in recent months. The fall in volatility is comparable, but still very unstable compared to other currency markets.

BTC/USD rate the last 12 months

Bitcoin price fluctuations are mostly due to reasons directly related to the digital currency. The strong Bitcoin growth at the end of 2013, for example, was based on various positive impulses from the market. The same applies to the catastrophic fall in prices caused by the Mt Gox bankruptcy in February of this year.

But there are also various reasons why the currency volatility and the Bitcoin boom are related. Bitcoin is outside the political and economic sphere of influence and this is exactly what makes it increasingly interesting for investors who have been “driven” by low interest rates in the USA, England and Europe. Thus Bitcoin could be seen as a highly volatile commodity: Interesting for investors in times of low market movements.

As long as the so-called questions and fears about Bitcoin’s legitimacy remain unanswered, there will be unpredictable price volatility. The longer this situation lasts, the better for Bitcoin. Traders are virtually forced to diversify their portfolios and their risk appetite is growing as economies recover even without liquid currency markets.

At the moment, however, the optimistic sentiment in many major indices is attracting a lot of investor attention. In addition, too many negative Bitcoin headlines are deterring investors looking for a Forex alternative.

The outlook for both assets could turn 180 degrees from now to now. An index correction was predicted some time ago. So Bitcoin could only be one big step away from another positive development. Should this happen, the lull in Forex volatility could bring the Bitcoin to a new big price.