Barclays analysts: bitcoin Price movements are similar to the spread of viral infections

The nature of bitcoin is largely similar to infectious diseases, and cryptocurrency investors themselves can be divided into three conditional groups: infected, susceptible to infection and are immune to it. To this conclusion came analysts at Barclays, writes Bloomberg.
In his study, Joseph Abeyt of the new York office of Barclays tried to build a model of the valuation of the asset, based on the laws of epidemiology.



"As more people become owners of assets, the proportion of the population that can move into the category of buyers (potential carriers of the virus) is falling, while the proportion of the population that is ready to move into the category of sellers (recovering) is growing. Ultimately, this leads to price stabilization, and, accordingly, as the number of random shocks that change the ratio of sellers and buyers increases, the price begins to fall," he wrote in his recent letter to customers.

According to him, this leads to oversaturation of offers for sale and, as a result, to an exponential decrease in the price.



"A similar dynamic is observed in the spread of infectious diseases, when the epidemic reaches the so – called threshold of immunity — the point at which a sufficient part of the population becomes immune, after which repeated outbreaks of the epidemic does not occur," the analyst writes.
The main variable determining when the growth of bitcoin is replaced by a fall is the proportion of the population that is aware of bitcoin and who wants to invest in it (receptive), Joseph Abeyt claims. Thus, in countries with developed economies, where everyone knows about bitcoin, the proportion of the susceptible population is small.



"We believe that the phase of speculative spread of investments in cryptocurrencies has remained in the past, along with it behind remained the peak values of prices," he concludes.
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