A recent report suggests that the volatility of the crypto market is now far less than the volatility exhibited by stock exchanges such as the Nasdaq and the S&P 500.
Crypto Volatility Is Now Less Than That of Stocks
While it may not seem like it, bitcoin and its many altcoin cousins have been much more stable and are steadier as of late when compared to their stock counterparts. Shares in companies continue to take heavy dips in recent weeks, while many main staples of crypto are holding their ground despite trading at considerably lesser prices than the all-time highs they achieved in late 2021.
Clara Medalie – head of research at Kaiko – explained in a recent interview:
Bitcoin volatility is at multi-year lows, while equity volatility is only at its lowest level since July. Equity markets have certainly been volatile over the past few months due to high inflation, an appreciating dollar, rising interest rates, and the ongoing war and energy crisis. The data suggests cryptocurrency markets are less reactive to volatile macro events than they were earlier on in the year, whereas equity markets have remained highly sensitive.
The digital currency space has been experiencing its most bearish conditions in years. The arena lost more than $2 trillion in overall valuation over the past few months alone, while assets like bitcoin – the world’s number one crypto by market cap – have experienced losses exceeding 70 percent from the all-time highs they witnessed last November. During that time, bitcoin was trading at a whopping $68,000 per unit, though at the time of writing, the currency is struggling to maintain a position in the low $19K range. It’s a sad and ugly sight to see.
And yet despite all the gloom and doom that’s occurred over the past 12 months, it appears crypto is doing much better than the stock market, which at press time, is far more speculative and more prone to price swings. At least with crypto, traders have an idea of where things will be, while stock players remain as vulnerable as ever. Who would have ever thought this could occur?
People Should Remain Cautious
Despite this relatively good news, the crypto market and the rest of the financial industry remain completely fragile, with Yuya Hasegawa – a crypto market analyst at the Japanese digital currency exchange Bit Bank – mentioning in a statement:
Even though we have seen some signs of declining housing market demands and slower inflation this week, the market is on high alert for next month’s FOMC meeting and ignoring the economic data that could justify a more cautious approach to rate hikes. We will likely not see any big movement until the meeting. However, the area around $19,000 will likely continue to be support for the price of bitcoin.