Barclay Analysts: Bitcoin is Like An Infectious Disease

According to Barclays Bank analysts, Bitcoin bears a lot of resemblance to the common flu. They arrived to  this conclusion by developing a price model for bitcoin and comparing it to the rise of the spread of the flu over time. Their analysis had resulted into an inference that Bitcoin has already reached its peak.
The Barclays model categorized the entire group of potential Bitcoin investors into three subgroups: the susceptible, the infected and the immune. Their assumption was that the number of people being hooked on to investing in bitcoin grows as the price increases. They even likened it to an infection being spread. In a somewhat similar same way, bitcoin interest is sparked by “word of mouth” because when people hear of a way of getting rich fast, their first impulse is usually to give it a try. This concept had been discussed in detail by the leader of the Barclay analysts, Joseph Abate. “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.”
A parallel dynamic plays out with infectious diseases when the so-called immunity threshold is reached, “the point at which a sufficient portion of the population becomes immune such that there are no more secondary infections,” the analysts noted.
Barclay has also said that the major variables which determine whenever Bitcoin’s price rises or dips down are: the part of the population aware of the cryptocurrency and the part who are willing to invest (those that are prone to infection). In addition to this, data from surveys also support the claim that awareness is close to being universal and  that the susceptible population is small in developed countries.
According to the model, Bitcoin may never surpass its impressive peak of $20,000 last December after it has bounced back from its price collapse last 2011 and 2013. At the time of writing the bitcoin price was at $8,122.
It is quite remarkable that the analysts have said that the “speculative froth phase of cryptocurrency investment- and perhaps its peak prices – may have passed.”

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