Bitcoin (BTC) Price Volatility is Stabilizing Amidst Stock Market Turbulence
Falling Bitcoin Price Volatility Lower Than Tech Stocks
Though bitcoin’s opponents tend to give various reasons for the lack of viability of bitcoin as a payment source, one particular point of attention for both economists and general observers is price volatility. The reduction in volatility in the bitcoin market has reached a point where it is less volatility than tech stocks in the traditional market.
The reduction in price fluctuation can be attributed to the ongoing 2018 bear market. Once bitcoin reached a high of $20,000 last year, the price of BTC declined over the course of the year to its current value of anywhere from $6,300 to $6,500. And though most cryptocurrency investors are displeased with the absence of price appreciation, which has wiped away the price gains that the coin experienced in 2017, others view the reduction in volatility as an indication of bitcoin’s long-term health.
Bloomberg is now reporting that the reduction in price volatility dropped below tech stocks as well, which makes cryptocurrency a stable investment compared to that market sector. The report stated:
“The tech sector has been front and center of the global equity sell-off while the digital currency has remained listless. That’s pushed the spread between the 10-day volatility of the NYSE FANG+ Index and the digital currency to a record high of 46 percentage points according to Bloomberg data. “
Bloomberg further reports that the trend concerning increased tech volatility compared to the cryptocurrency market cap may continue over the long term as the technology industry continues to create volatility as disappointing earning statements by Amazon.com and Google’s Alphabet Inc. come to light.
CEO of ConFi Timothy Tam reported that tech is being negatively affected in particular due to its impressive performance over the past several years. The more uncertainty that mounts, the more firms are beginning to worry of an upcoming recession in 2020. JPMorgan published a report earlier this week stating that there is a 60 percent chance of such a recession. The report indicated,
“Volatility is coming into the traditional markets and when things correct, it’s going to be the outperformers like tech which are the most volatile.”
The technology sector’s performance may impact bitcoin and other large-market cap cryptocurrencies because investors may start looking for shelter or re-ignite gains in the crypto markets as traditional stocks become less volatile. The reduction in price volatility, even without an improvement in bitcoin or alt market’s value, will quiet the opposition who believe that crypto adoption cannot take place without an erratic crypto market.