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Bitcoin is proving less volatile than stocks

Bitcoin has shown itself to be less volatile than stock markets these days.
| Cryptopress
Updated: October 24, 2022

CryptoPress

For the first time in two years, Bitcoin’s 20-day realized volatility, a statistic that captures daily price fluctuations, has slipped below the Nasdaq and S&P 500, according to research released this week by crypto data provider Kaiko.

After more than a month of trading around $19,000, bitcoin’s volatility is currently lower than that of the Nasdaq and S&P 500.

Even with bitcoin‘s heightened susceptibility to macroeconomic data releases, the difference between bitcoin’s 30-day and 90-day volatility and that of stocks has been narrowing since mid-September, according to Kaiko.

The price of Bitcoin has been far less volatile over the last three weeks. Prior to the specified 20-day timeframe, volatility in both crypto markets and stocks had reached a 40-year high.

Following a short increase in the dollar index and as the 10-year U.S. Treasury yield reached a 14-year high, bitcoin briefly dropped below the $19,000 threshold on Friday. However, it has subsequently recovered.

Bitcoin price increased by 0.7% to reach $19,189. Earlier in the day, the price reached a low of $18,677.50. The price of Ether rose 1.4% to $1,302.40 after touching a low of $1,254.80.

On Friday, the 10-year U.S. Treasury yield reached 4.308 percent for the first time since 2008, but retreated amid a report that some Federal Reserve members are worried about excessive rate tightening. In addition, the dollar index briefly reached a session high of 113,906 before surrendering most of its gains.

Hot inflation readings from the U.S. economy have led many to believe that the Federal Reserve’s terminal rate (the peak of their interest rate hikes) is still a ways off—the Fed has already raised rates by 0.75 percentage points three times this year, with the first increase being the steepest since 1994.

Since the second part of September, according to Kaiko, the difference between 30-day and 90-day volatility estimates for Bitcoin and stocks has been narrowing.

Bitcoin volatility is at its lowest level in many years, whilst equities volatility is merely at its lowest level since July.

Since the beginning of that month, both the Nasdaq 100 and the S&P 500 have declined almost 10%.

Clara Medalie, the head of research at Kaiko, said to the news source:

“Over the last several months, equity markets have clearly been turbulent owing to increasing inflation, a strengthening currency, rising interest rates, and the continuing conflict and oil crises,” she stated.

Photo: Pierre Borthiry – Peiobty on Unsplash.

© 2022 Cryptopress. For informational purposes only, not offered as advice of any kind.

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