Market analytics reveal that the 20-day historical volatility (HV) of Bitcoin has dropped to 31.5 percent. This is lower than the volatility of Amazon.com and Netflix, temporarily making the world’s leading digital currency a safer investment.
Less Volatile and Better Performing
Data from CBOE Global Markets reveals that the 20-day HV of Bitcoin has fallen below that of online retail mogul Amazon.com (35%) and Netflix (52%). In other words, the world’s leading cryptocurrency has become a less risky investment than buying stocks of both companies.
Speaking on the matter, Kevin Davitt, a senior instructor at The Options Institute at CBOE, noted:
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%.
Day traders are undoubtedly yearning for BTC’s volatility to pick up in order to realize the potential for quick and large gains. This position was recently reiterated by the CEO of cryptocurrency exchange BitMEX, Arthur Hayes, who said that Bitcoin’s volatility is what makes it attractive to investors for the reasons outlined above.
On the other hand, we have Bitcoin evangelists – people who believe in the merits behind the cryptocurrency and see high volatility as a major hurdle for further widespread adoption. Kevin Davitt said:
Perhaps we are witnessing the maturation of a 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.
Earlier in October, Live Bitcoin News reported that the crypto market’s forerunner has traded in its narrowest range for any consecutive 28-day period ever since December 2016.
What do you think of Bitcoin’s low volatility? Don’t hesitate to let us know in the comments below!
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