Bitcoin’s month of calm shows frenzy turning into apathy

The words bitcoin and boring have rarely been uttered in the same breath.

But after a dizzying rally, a gut-wrenching crash and near-constant ups and downs over the past two years, the cryptocurrency did something strange in recent weeks: it stayed relatively still.

Bitcoin has traded in a US$732 range since 7 September, swinging no more than 12% from peak to trough, according to Bitstamp prices compiled by Bloomberg. That’s the narrowest trading band for any rolling 28-day period since December 2016, and well short of the 200% range during the height of crypto-mania in late 2017.

Bulls see the calm as evidence of a maturing market. But for Stephen Innes, head of Asia-Pacific trading at Oanda, it suggests investors may be losing interest in cryptocurrencies after a more than $600-billion selloff since the start of 2018. While the slump has been interspersed with several market rallies, they’ve become smaller and smaller as the year has progressed.

“It’s not that exciting anymore,” Innes said.

At least some of the speculative cash that was in cryptocurrencies has probably moved into other trendy bets like marijuana stocks, Innes said. A handful of smaller cryptocurrencies, such as XRP, have also seen an uptick in volatility for coin-specific reasons.

But for now at least, bitcoin shows few signs of breaking out of its malaise. It was little changed on Friday, hovering around the $6 540 level as of 8.15am in London.

“It’s been pretty flat for so long now,” Innes said. “That doesn’t really entice investors.”  — Reported by Eric Lam, with assistance from Pei Yi Mak, (c) 2018 Bloomberg LP