• 102 days Could Crypto Overtake Traditional Investment?
  • 106 days Americans Still Quitting Jobs At Record Pace
  • 108 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 112 days Is The Dollar Too Strong?
  • 112 days Big Tech Disappoints Investors on Earnings Calls
  • 113 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 114 days China Is Quietly Trying To Distance Itself From Russia
  • 115 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 119 days Crypto Investors Won Big In 2021
  • 119 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 120 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 122 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 122 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 126 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 127 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 127 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 129 days Are NFTs About To Take Over Gaming?
  • 129 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 132 days What’s Causing Inflation In The United States?
  • 134 days Intel Joins Russian Exodus as Chip Shortage Digs In
Crypto Mining Migration Continues As Bans Line Up

Crypto Mining Migration Continues As Bans Line Up

The government of Kosovo, which…

Is Crypto Finally Ready To Pay The Piper?

Is Crypto Finally Ready To Pay The Piper?

Considering the recent surge in…

Crypto Pain Continues as Bitcoin Hits 6-Month Low

Crypto Pain Continues as Bitcoin Hits 6-Month Low

Bitcoin’s price plunged below $32,000…

  1. Home
  2. Cryptocurrencies
  3. Bitcoin

Bitcoin Volatility Falls To Two-Year Low

BTC

Bitcoin, like most cryptocurrencies, has experienced tremendous pain in 2018, but there is a silver lining developing - in stark contrast to the violent swings in global equity markets, wild price swings have been absent in daily Bitcoin flows in the last month or so.

Measured on a weekly basis, absolute levels of Bitcoin volatility is probing levels not seen since late 2016, right before the most massive pump and dump in modern times took the coin from $700 to almost $20,000 within 12 months.

"Volatility has been a major characteristic of the digital currency, which turned 10-years-old last week, throwing up major hurdles to its emergence as a mainstream asset class," said Reuters.

Bitcoin volatility sinks to a near two-year low

(Click to enlarge)

However, even more noteworthy is the fact that Bitcoin is now less volatile intra-month than the S&P 500 (October saw Bitcoin's high to low range of 11.3%, smaller than the 12.9% range in the S&P 500)...

(Click to enlarge)

And on a weekly basis, Bitcoin remains notably less volatile than stocks...

(Click to enlarge)

Many of Wall Streets' seasoned institutional traders were skeptical about Bitcoin's ability to store a value from the start, with most of them stayed clear and watched the spectacular rise, then fall of the coin.

From the high of roughly $20,000 in late December 2017, the coin collapsed 70% to the 6,000 handle, where it currently trades lifeless today.

(Click to enlarge)

During the collapse, regulators across the world emphasized price instability when issuing warnings to gullible retail investors who mistakenly listened to CNBC's cryptocurrency research desk's 24/7 pump. Related: Silicon Valley Investor Calls Start-Up Economy A Ponzi Scheme

Institutions are still waiting for more guidance on how regulators will handle bitcoin products such as exchange-traded funds, leading most compliance segments within firms to heavily restrict their trading desks from buying.

Oliver von Landsberg-Sadie, CEO of BCB Group, a cryptocurrency prime broker, warned Reuters, that a decline in trading volumes over the last three months had been a key factor in declining volatility.

(Click to enlarge)

In contrast to bitcoin, volatility in the S&P 500 has climbed to near seven-month highs, due to monetary tightening and fears of a global slowdown. As shown below, Bitcoin has now become more stable than U.S. stocks as per graphic via Reuters.

(Click to enlarge)

Reuter's Bitcoin chart pack-

Bitcoin historically tracks the JPM dollar index but is now diverging.

(Click to enlarge)

Bitcoin generally tracks gold prices.

(Click to enlarge)

Current Bitcoin rally reflects deteriorating outlook for U.S. government bonds.

(Click to enlarge)

Low U.S. inflation is bearish for Bitcoin.

(Click to enlarge)

Top 11 famous people's Bitcoin prediction:

(Click to enlarge)

As for Bitcoin's future price action, well, it is anyone's guess as to the next directional imbalance. One thing that is certain, volatility tends to resurface after periods of extremely low volatility... and stability will not hurt the cryptocurrency's chances of attracting institutional money - the holy grail of the next leg higher in Bitcoin.

Bloomberg Intelligence analyst Mike McGlone has remarked that high volatility levels have previously been “a major factor lessening most cryptocurrency use cases” and that recently low levels are “a sign of speculation leaving the market and eventually a bottoming process."

By Zerohedge 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment