FINANCIAL SERVICES
particularly susceptible to economic stress , as its liquidity is insufficient to manage large , panic-induced flows without causing significant price disruptions .
Zachary Michaelson , Snr . Director Digital Assets & Emerging Technology Lead for digital transformation company Publicis Sapient says : “ Bitcoin operates under a cloud of regulatory and legal uncertainty . Any global economic shift hinting at tighter crypto regulations , or legal actions such as criminal enforcement or bankruptcies of major players , can provoke sharp , disproportionate volatility .
“ Traditional assets like gold and stocks , on the other hand , are regulated within well-established frameworks that typically shield them more from uncertainty and exposure to individual bad actors . Economic variables such s inflation or interest rate adjustments influence asset classes differently . Bitcoin ’ s reactions are more erratic , swayed heavily by investor sentiment and speculative trading .”
Structural breaks in market dynamics , occurring around major global events , lead to shifts in trading behaviours and market perceptions , further influencing Bitcoin ’ s price fluctuations .
132 July 2024