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Bitcoin Volatility Drops Below Nasdaq and S&P 500 For First Time Since 2020


A crypto crash and the onset of a new so-called “crypto winter” have left many companies in the industry facing a liquidity crisis.

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While the bitcoin price has been stuck lately, there’s one good thing coming from it for investors betting on the cryptocurrency to become a legitimate asset class: It’s been a less bewildering ride. .

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

The data provider said on Friday that the cryptocurrency’s 20-day volatility has now fallen below that of stock indexes for the first time since 2020. On Monday, it fell sufficiently. to match Nasdaq volatility. It is welcome news for many longtime crypto investors, who hope that the infamous cryptocurrency’s mellow price movements may bring less fear to new investors. potential.

Kaiko also said the gap between bitcoin and equities’ 30-day and 90-day volatility periods has narrowed since mid-September, even as bitcoin is more sensitive to macroeconomic data releases. (Although bitcoin’s correlation with stocks has eased, it remains high, and its price continues to be driven by macro themes.)

Clara Medalie, head of research at Kaiko, told CNBC: “Bitcoin volatility is at a multi-year low while equity volatility is at its lowest level since July.” . “The stock market has certainly been volatile over the past few months due to high inflation, a rising dollar, rising interest rates and the ongoing war and energy crisis. Data shows crypto markets. less responsive to volatile macro events than earlier in the year, while the stock market remains very sensitive.”

On Friday, bitcoin dipped below $19,000, following a brief spike in the dollar index and as 10-year US Treasury yields surged to 14-year highs. It recovered a bit and has been in a straight line ever since.

The bitcoin price was last 1% lower at $18,966.00, according to Coin Metrics. Earlier in the day, it dropped to as low as $18,677.50. Ether is also slightly lower and is trading at $1,283.80, after finding a previous low of $1,254.80.

On Friday, the US 10-year Treasury note yield as high as 4,308% for the first time since 2008 but backed off after a report that some Federal Reserve officials were concerned about excessive tightening with interest rate hikes. The dollar index also briefly spiked to an intraday high of 113.906 before losing most of its gains.

The two largest cryptocurrencies by market cap are posting a losing week and a third negative week in a row, where Historically a Strong Month for Crypto Profits. For the month, bitcoin and ether are down around 1% and 3%, respectively.

“Although we have seen some signs of falling housing demand and slower inflation this week, the market remains on high alert for next month’s FOMC meeting and abandons it,” said Yuya Hasegawa. economic data may justify a more cautious approach to rate hikes. , a crypto market analyst at Japanese crypto exchange Bitbank.

“We probably won’t see any major movement until the meeting,” he added. “However, the area around $19,000 is likely to continue to be support for bitcoin price.”

— CNBC’s Christina Cheddar Berk contributed reporting

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