Coinbase Vice President: Currency price volatility has dropped by 70%, and Bitcoin's monetary attributes are gradually emerging

Adam White, vice president of Bitcoin trading and wallet platform Coinbase, said that Bitcoin's monetary function is gradually emerging, with specific manifestations including decreased volatility and increased merchant acceptance.

CNBC recently interviewed White about the sudden drop in Bitcoin prices. He believes that the price drop is essentially due to the Chinese government's reaffirmation of the 2013 document "Notice on Preventing Bitcoin Risks". Bitcoin exchanges can operate in the long term until relevant industry standards and regulatory rules are introduced.

The difference between 2013 and today

Currently, major bitcoin exchanges such as BTCC and OKCoin have established close ties with the Chinese central bank and local lawmakers. In particular, BTCC has held in-depth talks with the government over the past week to discuss the exchange’s business model and operations.

Bitcoin China recently participated in a meeting with relevant regulatory authorities including the Shanghai headquarters of the People's Bank of China and the Shanghai Municipal Financial Office. The head of Bitcoin China introduced the operation of the platform.

However, some false speculation and media reports about the Chinese Bitcoin exchange market have led to further declines in the price of the currency. In order to ensure that users and traders have a correct understanding of the relationship between Chinese Bitcoin exchanges and lawmakers, BTCC and other exchanges have issued official statements to remind users to be careful of some false reports.

BTCC added:

At the same time, we advise consumers to be rational and cautious about articles speculating on the motives of this interview.

Although BTCC and other major exchanges issued statements to clarify the purpose of the talks, some investors and traders still panic-sold due to misjudgment of the relationship between Chinese Bitcoin exchanges and the government due to some fake news.

In response, executives from several bitcoin companies, including Coinbase, discussed the Chinese market and the current state of bitcoin currency development with viewers on local television shows.

Rumors about Chinese bitcoin exchanges have had less impact on the price of bitcoin than they did in 2013. The main reason why the Chinese government’s intervention four years ago is so different from today’s situation is that bitcoin has become a global store of value with a growing user base.

International Currency

Over the past year, Bitcoin's advantages in preserving value have become increasingly apparent. In fact, due to its safe-haven properties, Bitcoin has been hailed as the best performing asset in 2016, outperforming all currencies. The price of the currency fluctuates only with market performance and investor demand.

In addition to its value-preserving function, Bitcoin's currency attributes are becoming increasingly evident, both in terms of low volatility and high merchant acceptance. As the volatility of the currency price has been greatly reduced, more and more merchants have begun to accept Bitcoin as a payment method.

Some time ago, news pointed out that the number of stores in Japan that accept Bitcoin payments has increased 4.5 times compared to last year.

Bitcoin itself is a relatively volatile asset, but over the past three to five years, this volatility has decreased. As of 2015, the volatility of the currency price has dropped to 25% of the previous level.