Bitcoin, the world’s largest cryptocurrency by market capitalization, is currently exhibiting significantly lower volatility compared to traditional asset classes like precious metals, fiat currencies, and even tech stocks such as Amazon and Meta.
Despite being in a period of historically lower trading volume during the summer, Bitcoin’s volatility remains notably subdued.
Bitcoin’s Low Volatility Amidst Summer Lull
According to analysts at The Block, Bitcoin’s annualized volatility, which measures the standard deviation of daily percentage price changes over the past 30 days, stands at around 32%. This figure is considerably lower than the average asset price volatility of 71%. The cryptocurrency’s relative stability is unusual, especially during the traditionally quieter summer period. This summer seems to be the calmest since 2020.
Block Research analyst Rebecca Stevens highlights the contrasting volatility experienced by Bitcoin during the summer of 2021. The cryptocurrency witnessed significant price fluctuations, including a sharp decline in May followed by a recovery later in the year. Stevens notes that last summer’s volatility was influenced by the overall crypto market decline and the aftermath of the Terra-Luna collapse.
While Bitcoin’s volatility still falls short of ultra-reliable assets like gold and Apple shares, its current stability surpasses that of Meta and Amazon stocks, which exhibit volatility levels of 44% and 34% respectively. In comparison, the Dow Jones Industrial Average is currently 13% volatile.
Expert Opinions on Bitcoin’s Volatility
Laura Vidiella, vice president of crypto investment firm LedgerPrime, believes that Bitcoin’s recent respite from price spikes does not indicate a significant change. She expects significant price swings and volatility to return in the fall, suggesting that the current period of stability may not become the new normal.
This sentiment aligns with the predictions of Maelstrom co-founder and CEO Arthur Hayes, who anticipates a crypto rally in the third or fourth quarter of 2023.
Bitcoin is currently demonstrating an unusually low level of volatility, surpassing that of traditional asset classes and even outperforming tech stocks like Meta and Amazon. Despite being in a period of reduced trading volume during the summer, Bitcoin’s stability stands out. However, experts caution that this period of low volatility may not persist, and significant price swings and volatility could resume in the coming months.