Bitcoin less volatile than stocks, but is that a good thing?

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Last Updated on 16 October 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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Bitcoin’s volatility index for the past month is noting it below the volatility level noted for tech stocks. After the volatility of the world’s largest crypto currency had already fallen in the past year, Bitcoin now seems to have been trading almost like a defensive stock.

While the Nasdaq in the US fell again yesterday, Bitcoin held up nicely around $19,000. And so it has been for several weeks.

On Thursday, Bitcoin fell to $18,400 as news of US inflation broke, but then climbed back to the $19,000 level when analysts digested the news. In fact, Bitcoin has barely moved in the past week. At the time of writing this article, Bitcoin moved a mere 1 percent the past week.

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Boring Bitcoin

Some say this means Bitcoin has bottomed out and won’t fall again, while others think it’s diminishing crypto’s appeal.

Low volatility in Bitcoin might not necessarily be a good thing, especially if it’s on low volume.

ARK Investment Management analyst Yassine Elmandjra said.

So while low volatility is perhaps an indication that Bitcoin is becoming more boring and less contrarian, low volatility on low volume might not be great for Bitcoin.

In the fall of 2020 there was also a long period where Bitcoin traded around $10,000 and didn’t seem to move, until the last fall weeks suddenly moved it really fast and the year saw Bitcoin end around the $30,000 level. Right now it really depends on how analysts interpret the stock markets.

If the next rate hike is thought to be the last, markets will be able to refocus on new growth and Bitcoin will also rise again. If more negative news comes our way (think of higher inflation figures or a new war, Taiwan versus China for example) then we will probably look for a new bottom.

Right now, we are looking at ‘Boring Bitcoin’ again.

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