A Closer Look at Bitcoin’s Volatility - Fidelity Digital Assets

May 1, 2024 · In a previous article, we discussed why bitcoin is volatile at a fundamental level. In this piece, we explore the data behind bitcoin’s volatility, how it compares over time and to …

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FAQs about A Closer Look at Bitcoin’s Volatility - Fidelity Digital Assets Coupon?

Why is bitcoin so volatile?

As to be expected, a young and nascent commodity or asset class with a small market cap is more likely to experience higher volatility as new capital flows into the asset. Bitcoin has been no exception with regular volatility in the triple digits, even breaching 200% on an annualized basis in its early years. ...

Is bitcoin a volatile stock?

Bitcoin is volatile, but less so than many popular mega-cap stocks. Bitcoin is currently less volatile than 33 S&P 500 stocks, and as recently as late 2023, there were 92 S&P 500 stocks more volatile than bitcoin. Bitcoin’s volatility has declined and is expected to continue doing so. ...

Are investors compensated for bitcoin's volatility?

Investors have historically been well compensated for bitcoin’s volatility. We propose a model that looks at bitcoin’s historic volatility at extremes, linking it with on-chain data to identify periods where volatility is historically low and seller energy is high. ...

How volatile is bitcoin in 2024?

In fact, from 2020 to 2024 (chosen to capture at the most recent four-year cycle in bitcoin), bitcoin has been three to nearly four times as volatile as various equity indices, as shown in the chart below. ...

Is bitcoin more volatile than the S&P 500?

Bitcoin is currently less volatile than 33 S&P 500 stocks, and as recently as late 2023, there were 92 S&P 500 stocks more volatile than bitcoin. Bitcoin’s volatility has declined and is expected to continue doing so. Investors have historically been well compensated for bitcoin’s volatility. ...

Is bitcoin a volatile asset class?

There is no denying that bitcoin is volatile as an investment asset class, both on an absolute basis and when compared to traditional asset classes. ...