Bitcoin volatility drops below Nasdaq and S&P 500 for first time since 2020 – Reuters

While bitcoin’s price has been stalled lately, there’s one good thing for investors to bet on crypto to become a legitimate asset class: it’s less of a wild ride.

After hovering at the $19,000 level for more than a month, bitcoin’s volatility is now below that of the Nasdaq and S&P 500, according to Kaiko.

The data provider said on Friday that the cryptocurrency’s 20-day rolling volatility has now fallen below that of stock indices for the first time since 2020. On Monday, it had fallen enough to match the volatility of the Nasdaq. This is good news for many long-time crypto investors who are hoping that a softening of notorious crypto price swings might bring less fear to potential new investors.

Kaiko also said that the spread between bitcoin’s and equities’ 30- and 90-day volatilities has narrowed since mid-September, even with bitcoin’s heightened sensitivity to macroeconomic data releases. (Although bitcoin’s correlation to stocks has eased, it remains elevated and its price continues to be driven by macro themes.)

“Bitcoin volatility is at multi-year lows while equity volatility is only at its lowest level since July,” Clara Medalie, head of research at Kaiko, told CNBC. “Stock markets have certainly been volatile over the past few months due to high inflation, the appreciation of the dollar, rising interest rates and the ongoing war and energy crisis. The data suggests that cryptocurrency markets are less reactive to volatile macro events than they used to be. over the year, while equity markets remained very sensitive.”

On Friday, bitcoin fell below the $19,000 level, following a brief spike in the dollar index and as the 10-year US Treasury yield hit a 14-year high. It has bounced back a bit and has since moved above the flatline.

Bitcoin price was last less than 1% lower at $18,966.00, according to Coin Metrics. Earlier today, it fell to $18,677.50. Ether also fell less slightly and was trading at $1,283.80, having found an earlier low of $1,254.80.

On Friday, the 10-year US Treasury yield hit 4.308% for the first time since 2008, but fell after a report that some Federal Reserve officials are worried about excessive tightening with rate hikes. The dollar index also briefly jumped to a session high of 113.906 before shedding most of its gains.

The two largest cryptocurrencies by market capitalization are set to post a week of declines and their third consecutive negative week, in what is historically a strong month for crypto returns. For the month, bitcoin and ether are down around 1% and 3%, respectively.

“Even though we’ve seen signs of falling demand in the housing market and slowing inflation this week, the market is on high alert for next month’s FOMC meeting and ignoring economic data coming in. could warrant a more cautious approach to rate hikes,” Yuya Hasegawa said. , a crypto market analyst at Japanese crypto exchange Bitbank.

“We probably won’t see a big move before the meeting,” he added. “However, the area around $19,000 will likely continue to be support for bitcoin price.”

—CNBC’s Christina Cheddar Berk contributed reporting

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Bitcoin volatility drops below Nasdaq and S&P 500 for first time since 2020 – Reuters

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