New Bitcoin Market Data Shows Substantial Drop in Degree of BTC’s Price Volatility as Maturity Settles In
Bitcoin has a terrible rap for volatility. And after what happened during 2018, it would seem obvious it is very volatile, but if you look at the available hard data, it's actually not.
Specialists have compared Bitcoin's behavior with that of the stock market, oil, and other traditional financial investment instruments and they've concluded that, over the last ten years, it's been the most reliable investment you could make. Nope, we're not kidding.
But then, of course, there's the 2018 terrible bear market (which some are calling Crypto Winter) which was an unmitigated disaster and it hasn't finished yet.
Today's post is about that, precisely. Bitcoin (BTC) remains the world's largest cryptocurrency by market capitalization and the most influential one. And data recorded by Buy Bitcoin Worldwide seems to point to stabilization in Bitcoin's price.
The fact that Bitcoin is so important doesn't mean everybody is happy about it. It's been severely criticized because of its lack of scalability. Yes, the network remains very reliable, and it works. But waiting up to an hour to have a single transaction completed is not the kind of thing that gives users comfort or confidence.
And then there was that fateful day in which the price changed 15% in a single day. That doesn't help either.
A look at the data
Let's be a little more objective and colder. After December 2018, the volatility index is below 5%. For the last 30 days, it's at 2.13% and it's at 2.98 in 60 days.
June 20th, 2011 was the worst time regarding Bitcoin's volatility. Back then it was at 15.64%. And things didn't get any better for a few years. It only stabilized by February 2014… but that was also when a bearish run on the market started.
Between March 2015 and July 2017 the volatility index remained around 5%, and even as low as 4% by December 2017. And, then again, that was the moment of Bitcoin's historic high and everything went down from there. It's been free-falling for more than 15 months now. So volatility was at 7.26% only three months ago.
Bitcoin is currently trading at USD 3,979.18, which is just below the $4000 resistance level. This is not a great thing because it supposed to mean that the price will fall down again when it reaches $4000 so we could see a new roller-coaster run.
The 30-day standard deviation during the 2013 November and December collapse was at 12%. The 60-day parameter was at around 9%.
But the next Bitcoin crash (December 18th, 2017) saw a recovery in price fluctuations, with the monthly standard deviation at 9%, and less than 6% in 60 days. It was lower than NASDAQ or S&P which are something of the golden standards in the financial world.
Things are obviously not peachy right now. But if you look at the data we've offered you in this article you could conclude that the world's largest digital currency is becoming progressively more stable in terms of price and value.
And let's not forget something else. Bitcoin is not just a cryptocurrency. It's also a global payments system and, as such, it's already quite successful. It moves so much money around the world as Visa or Mastercard do. That is a fundamental value, and it creates demand for the token as well as confidence and respectability in users.