Is Bitcoin More Stable Than Traditional Exchange Stock?

Day traders who hope to make a fortune by trading the world’s largest cryptocurrency by market cap have been heavily disappointed over the last couple of weeks. Bitcoin has achieved relative stability over this period and even posted low volatility rates than stocks being offered by some popular Wall Street Firms.

This new milestone was confirmed with data compiled by CBOE Markets over a 20 day period. Within the period under the consideration, the exchange service providers noted that Bitcoin’s Historical Volatility (HV) had dropped to as low as 31.5%.

This figure is quite impressive because it is below the 35% recorded by retail giants Amazon Inc. In addition, the 31.5% Bitcoin HV rate is also below the 52% recorded by Netflix and mining chip producer, Nvidia Corp (40%).

Next target for bitcoin stability would be tech giants Apple incorporated whose stock posted a 29.3% HV during the same period. See the chart below.

Bitcoin Low Historical Volatility: Too Early or Ready To Go?

Since the advent of Bitcoin, the cryptocurrency has been heavily criticized for its high volatility and unstable charts. Moving from around to $6000 to near $20000 during the tail end of last year only helped to justify claims by skeptics that the unit was not ready for use in the mainstream.

However, the low historical volatility shows that the time for massive bitcoin adoption maybe near rather than far. Since the start of October, Bitcoin has traded closely between $6200-6000, this is with the exception of October 14 when the coin strayed to $6900 before making a quick comeback.

If people and institutions will easily adopt bitcoin, then knowing that their assets would not rise and fall almost immediately can be the stepping stone. This will build more trust in the cryptocurrency and will, in the long run, increase its value for day to day transactions.

While the Day traders hope for bitcoin to become more volatile soon, the wider community will likely be interested in seeing how long the low HV continues since it will hold more long-term benefits for everyone.

Kevin Davitt, a senior instructor at The Options Institute at CBOE called it a “new normal” which may be pointing to the “maturation of the market.” Only time will tell how long Bitcoin continues to remain stable and just how much the market will grow within this period.