Cryptocurrency mania has steadily grown since Bitcoin was first introduced and took the financial world by storm. Now that Bitcoin’s halving process is over, the big question is what happens now? As a barometer of the risk posed to investors, the good news is that Bitcoin’s volatility risk premium (VRP) indicates a period of stability ahead.
For cryptocurrency holders, stability is never a bad thing. Stability provides a degree of certainty around investing and using crypto. And, as digital currency adoption increases, crypto holders can now use their crypto for a variety of purposes, beyond stores of value.
Popular Uses of Crypto
Speaking of those uses, so-called crypto casinos are all the rage, with many offering huge bonuses and free spins to help attract players. The range of online casinos and gambling outlets that can now be accessed with crypto is larger than ever. Greater stability is beneficial for players, as it means the value of their tokens is less likely to decrease, meaning their winnings will be worth more.
For Bitcoin holders, specialized online crypto casinos cater exclusively to Bitcoin, providing plenty of promotional benefits along the way. With all these incentives for both the platforms and players alike, it seems that the partnerships between cryptocurrencies and online casinos are set to keep growing.
However, gambling is far from the only popular use for cryptocurrencies. Whether you’re looking for electronics, luxury items, a cheap car, or even real estate, Bitcoin and other cryptocurrencies are widely accepted as a valid payment method now. It may seem unbelievable, but even a Lamborghini can be bought with cryptocurrency.
For those of lesser means, things like insurance policies can be paid for with Bitcoin. Meanwhile, gaming platforms also often accept it for in-game purchases, and many people use cryptocurrency on e-commerce sites to purchase books. The fact that there’s now such a thing as a Bitcoin debit card that converts your crypto into fiat money proves that you can now literally buy anything with cryptocurrency under the right circumstances. With purchase options increasing and Bitcoin’s stability leveling out for the foreseeable future, we may see increased crypto purchase transactions as crypto holders take advantage of Bitcoin’s newfound stability.
Why Stability Matters
In the build-up to Bitcoin’s much anticipated halving process, the market reacted favorably, with huge gains in its value being posted since last year. While the immediate aftermath of the event has seen things taper off, most indicators like Bitcoin’s VRP show that the cryptocurrency, and many others linked to its fate, are set for a period of stability.
This is important for Bitcoin and other cryptocurrencies as it gives investors a degree of certainty. At the same time, stability also increases trading activity, meaning more investors are likely to increase their existing holdings or enter the market for the first time, stimulating it and providing greater opportunities for overall growth.
Whether investors are just in the market for returns, looking to augment a retirement plan, a means to fund other business ideas, or any number of other legitimate benefits, in simple terms, Bitcoin’s current VRP means uncertainty and volatility give way to relative predictability — something long term investors always look for. According to Bitfinex analysts, Bitcoin’s one-month VRP has gone down to 2.5% from 15% after the Bitcoin halving event which took place in April.
The halving process was expected to feature large short-term gains like it had in the past. However, while these haven’t materialized as dramatically as expected, the currency has stabilized from recent lows and looks set to keep up that pattern of relative flattening.
Conclusion
Bitcoin’s recent halving came with a ton of positive market and news sentiment. Now that it’s over, not much has changed and the large gains expected have instead been replaced with a collapsed VRP that indicates stability ahead.
With Bitcoin and other cryptocurrencies now having more uses than ever, stability in the market means holders have relative certainty over them. Whether you use cryptocurrencies for shopping, reinvestment in budget stocks, long-term investment, online gambling, or anything else, the news is welcome, since stability is always a good thing.