Bitcoin Volatility Has Collapsed Since 2014
Source, 30-Day BTC/USD volatility: https://btcvol.info/
Bitcoin used to be extremely volatile. In the early days of 2011, for instance, daily return volatility spiked over 15%. That's huge! For comparison, S&P 500 stocks tend to bounce around in that range over the course of a year.
Popular economic-political commentator Peter Schiff declared that "Bitcoin Is Just Too Volatile To Be Money" as recently as this last August, and the [in]famous investment bank, Goldman Sachs, issued a note to clients saying that Bitcoin is too volatile.
Bitcoin volatility is now about 1/4th the pre-2014 average, and 1/6th the 2010 highs. Of course, the future can bring anything, but, at least for now, commentators and investment bankers should update their data ranges and stop declaring Bitcoin "too volatile."
What are your thoughts?
If you like this post, please upvote, resteem, or share below! Please check out my other articles and follow @finpunk to keep in touch with future content.
Rob Viglione is a PhD Candidate in Finance @UofSC with research interests in cryptofinance, asset pricing, and innovation. He is a former physicist, mercenary mathematician, and military officer with experience in satellite radar, space launch vehicles, and combat support intelligence. Currently a Principal at Key Force Consulting, LLC, a start-up consulting group in North Carolina, and Head of U.S. & Canada Ambassadors @BlockPay, Rob holds an MBA in Finance & Marketing and the PMP certification. He is a passionate libertarian who advocates peace, freedom, and respect for individual life.
Interesting, I have to do a statistical analysis on this. Yes basically as the liquidity increases, the volatility decreases, because the market risk is less with a good deep order book.
It'll be interesting to see if lower volatility induces institutional adoption and investment.
It should and it probably will. Bankers and wealth managers already own bitcoin secretly, they just havent added them to their public funds since it's still a controversial investment.
True, i imagine so
It's a new currency world that's only understood by people younger than a tyranosaurus rex. So you can't really blame them for not getting into it.
I think in a few years, once platforms like Steemit take off, they will be scrambling to get on board and try to control it.
I'll take volatility of stagnation any day. (but then I'm not an investment banker)
True, good point. By the time Bitcoin is mainstream it'll stop being as interesting and we'll be on to the next thing.
This post has been ranked within the top 80 most undervalued posts in the first half of Nov 30. We estimate that this post is undervalued by $4.54 as compared to a scenario in which every voter had an equal say.
See the full rankings and details in The Daily Tribune: Nov 30 - Part I. You can also read about some of our methodology, data analysis and technical details in our initial post.
If you are the author and would prefer not to receive these comments, simply reply "Stop" to this comment.