Barclays compares Bitcoin to infectious disease: The investment bank Barclays likens the spread of the Bitcoin (BTC) to that of an “infectious disease” spreading, reports Business Insider Australia. Barclays analysts based their findings on the models that epidemiologists use to track diseases.
The models were compared to Bitcoin’s price swings from the past seven years. The analysts were checking if there were any connections between how an infectious disease spreads and how Bitcoin has performed in the past to see if they could predict any of Bitcoin’s future. The results were surprising.
“We developed a theoretical model of an asset price with a pool of speculative investors and compared it with actual Bitcoin price behavior to see what it might imply for the future dynamics. The model has clear parallels with compartmental models of the spread of an infectious disease in epidemiology.”
Barclays says this connection is why Bitcoin and other cryptocurrencies are slackening off now. Back in December, when the crypto hype was at its highest, prices swelled. However, like a spreading infection, it can only continue growing for so long.
They explained this reasoning further:
“As more of the population become asset holders, the share of the population available to become new buyers – the potential ‘host’ population – falls, while the share of the population that are potential sellers (‘recoveries’) increases. Eventually, this leads to a plateauing of prices, and progressively, as random shocks to the larger supply population push up the ratio of sellers to buyers […] prices begin to fall. That induces speculative selling pressure as price declines are projected forward exponentially. Analogously, this occurs with infectious diseases when the immunity threshold is reached; ie, the point at which a sufficient portion of the population becomes immune such that there are no more secondary infections.”
So, essentially, growth (spread) will stagnate because there will be no one left to ‘catch the cold that is Bitcoin,’ if you will.
Is this the stage that we’re in right now?
“Unlike past peaks in Bitcoin prices, the survey evidence, based on our modelling, suggests that the speculative bubble in crypto currencies may have passed its peak,” stated Barclays.
Do you agree?
Bitcoin is currently selling for $6,830.23, which puts BTC down 66% from its all-time high in December, according to CoinMarketCap data.
Tell us what you think? ‘Barclays Compares Bitcoin To Infectious Disease’ – Was that a heading you thought you’d ever read? Leave your comments below!
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