Bitcoin (BTC) has traded in tandem with equities in recent months, with both asset classes struggling with the prevailing macroeconomic factors fueled by runaway inflation and rising interest rates. However, bitcoin volatility appears to be on the decline compared to traditional equities as the flagship cryptocurrency shows signs of decoupling from equities.
In particular, as of October 7, the Dow Jones Index, which tracks the stocks of the 30 largest industrial companies, was more volatile than bitcoin, according to general data. ZeroHedge indicates.
Dow Jones/Bitcoin Volatility Chat. Source: Zero Hedge
Bitcoin’s latest achievement highlights the asset’s mature nature, given that it ranks among the most volatile investments. Its proponents, in particular, have stated that once bitcoin matures, characterized by wider adoption, the asset will become less volatile and will be traded like traditional assets.
Bitcoin Historical Volatility
In general, bitcoin has historically suffered from volatility, but traditional financial markets tend to be much more stable. However, the change in volatility can be attributed to bitcoin’s pullback from all-time highs, with the asset consolidating around $20,000 for several weeks.
In this case, this level is seen as a temporary low for bitcoin after an impressive bull run that culminated in an all-time high near $68,000 at the end of 2021.
At the same time, bitcoin’s lower volatility was driven by a stronger dollar, which caused global fiat currencies to lose value against the US currency. In this regard, the growth of the dollar could potentially have a negative impact on equity portfolios along with falling commodity prices.
However, bitcoin has maintained its stability and investors in some regions are turning to the asset for protection from price surges.
At the same time, bitcoin continues to consolidate below $20,000 as bears and bulls fight for control. At press time, the asset was trading at $19,500 with losses of less than 1% over the last 24 hours.
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