Without major swings in recent months, Bitcoin becomes less volatile than stocks. For example, in 2020, a VanEck study found that BTC was less volatile than 112 of the 500 stocks in the S&P 500 index over a 90-day period, as well as 145 of these stocks on an annual basis.
In recent days, even the largest stocks in the world have been more volatile than Bitcoin. As emphasized by Zero Hedge, the fault lies with the US Federal Reserve.
“The Fed has finally done it, they have broken the market: The Dow Jones (index of the world’s 30 largest industrial stocks) is officially more volatile than bitcoin.”
The Fed finally did it, they broke the market:
the dow jones (30 largest industrial stocks on earth) is officially more volatile than bitcoin pic.twitter.com/BfveiMYZy2
— zerohedge (@zerohedge) October 7, 2022
The good news is that Bitcoin can become a unit of account – one of the three pillars, in addition to a store of value and a means of purchase, that define a currency. After all, the high volatility has always fueled famous critics such as Nassim Taleb.
However, not everyone wants to see Bitcoin almost static, especially for investors. Still, this could be a result of the arrival of more and more institutional giants in recent years, changing the way it’s seen and negotiated.
Low Bitcoin Volatility Is A Warning Sign, Experts Point Out
Another portal that highlighted the game changer between Bitcoin and the stock market was Bloomberg. As a highlight, all guests were concerned about the stability of the largest cryptocurrency, especially as we are in a major recession.
“Low volatility in Bitcoin may not necessarily be a good thing, especially if it has low volume.”
The above speech by Yassine Elmandjra of ARK Investment notes that the volume of BTC has fallen along with the price since the beginning of the year. Going further, he points out that the same thing happened in 2018, before bitcoin plummeted from $6,000 to $3,000.
Steven McClurg of Valkyrie Investments is another who shares the same fear.
“In a general bear market you don’t want low volatility associated with low volume because we’re already in a recession period, we think it could get worse and the Fed will continue to raise interest rates and people can start taking money off the table.” .”Steven McClurg told Bloomberg.
“And when there is low volume and low volatility, prices will fall faster, which can lead to greater volatility.”
Finally, everyone is watching the US inflation data and how much and for how long the Fed will raise interest rates. As for BTC’s low volatility relative to stocks, it can be good as long as it’s not a trap.
Source: Live Coins
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
