The price of Bitcoin [BTC] has been moving sideways since the past two months after its drop on September 6. It has been contained within the $6,200 and the $6,600 marks, representing one of the most extended periods of non-volatility in the history of the cryptocurrency.
Prominent analysts on Wall Street have begun to notice the stability of one of the most volatile asset classes in recent history. Michael Moro, the CEO of Genesis Trading, recently appeared on an interview to state that he had realized its potential as digital gold.
Now, recent research has found that the top cryptocurrency is less volatile than some of the most popular stocks traded in traditional markets. According to Cboe Global Markets, the historical volatility over the past 20 days has declined to a low of 31.5%. In reference, Amazon, Netflix and Nvidia stocks are all more volatile than Bitcoin, at 35%, 52%, and 40% respectively.
The volatility of Bitcoin is approaching that of Apple, at 29.3%. Kevin Davitt, a senior instructor at the Options Institute at CBOE, stated:
“A one standard deviation move for bitcoin at present is about $475. That works out to +/- 7.3% (475/6500). Compare that to earlier this year (mid-January) when bitcoin was around $11,000. Back then the standard deviation measured $4640 or +/- 42%.”
Reportedly, during its historic decline from the $20,000 mark, Bitcoin’s volatility was at a high of 140%. However, it still pales in comparison to the volatility exhibited by the security of Tilray, a cannabis producing company. Tilray stocks are currently exhibiting a historic volatility of 219%.
The volatility of Bitcoin has been quoted as one of the reasons for it not being a suitable investment. The recent sideways movement has been a godsend for the enthusiasts of the cryptocurrency space, as it shows that the price can be in a period of non-volatility for an extended period of time.
“Perhaps we are witnessing the maturation of the market. It’s far too early to declare this the ‘new normal’ but the persistent range over the last few weeks may be hinting at a structural shift. Time will tell.”
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