Bitcoin’s Volatility Now Lower Than S&P 500 Index

Bloomberg data show that Bitcoin is now less volatile than the benchmark S&P 500 index for the first time since mid-2020.

Over the last few months, the world’s largest cryptocurrency has been stuck in a tight range, with bulls and bears now waging tug-of-war. The cryptocurrency king has historically been described as a volatile asset. The volatility was caused by Bitcoin’s very small market capitalization. The most valuable cryptocurrency is currently worth $367 billion.

Meanwhile, the S&P 500 index has a market capitalization of $35.1 trillion. The S&P 500 index rose significantly earlier this week as a result of a successful earnings season. Despite moving in tandem with US equities for nearly the whole year, Bitcoin failed to catch up with them.

Although Bitcoin is no longer “boring” during down market cycles due to reduced prices and volatility, trade volumes remain continuously high. It is not unreasonable to expect such a prolonged period of volatility to be followed by a significant increase in leverage. As a result, the significant decrease in volatility is unlikely to result in long-term stability.

Bitcoin and stocks both fell sharply earlier this year after the United States Federal Reserve began rapidly raising interest rates. Because interest rates are predicted to rise further, Bitcoin is likely to see increased volatility.

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