Bitcoin Showed a Reduced Level of Volatility in 2019

By Marko Vidrih on The Capital

Last Tuesday was marked by a surge in volatility in the cryptocurrency market. Bitcoin, for example, rose above $8,200, where it has not been traded since mid-November. However, on a longer time period, the leading cryptocurrency demonstrates relative stability, SFOX analysts say.

According to their latest report, by mid-2019, the metric of “30-day historical volatility,” that is, a deviation from the average price for 30 days, exceeded 70%, but by the end of the fall it fell to 32%.

Analysts also note that Bitcoin shows higher annualized returns than gold and the S&P 500.

“Bitcoin shows itself to be a predominantly non-correlating asset relative to the S&P 500 and gold. Data indicating high profitability and low volatility of Bitcoin made it an attractive tool for portfolio management in 2019,” they write.

Despite the low volatility in 2019, SFOX suggests that 2020 may be different. The next months are preparing several “potentially significant, but at the same time difficult to evaluate factors.” These include, for example, optional products and halving, due in May.

The authors of the report also noted a significant decrease in the level of correlation of cryptocurrency assets at the end of the year. This is especially noticeable in the violation of the positive correlation of Bitcoin with Bitcoin Cash, Bitcoin SV and Ethereum Classic.

Whether these altcoins will continue to demonstrate a lower level of correlation with bitcoin in 2020, time will tell.

“All cryptocurrency assets remain, for the most part, uncorrelated with gold and the S&P 500,” added SFOX.