The Dow Jones industrial average, which includes the largest U.S. companies, has become more volatile than bitcoin, according to charts and analysis by Bespoke Investment Group, a popular investment research group. Bespoke explains in its research that, according to the data obtained from its graphs: “bitcoin is now less volatile than major stocks.”
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Global investment manager VanEck also shows in its long-term studies that “cryptocurrency exhibits lower volatility than 112 S&P 500 stocks over a 90-day period and 145 stocks year-to-date.” These studies also show that Bitcoin has outperformed the Nasdaq and other stock indices this September, as the currency has remained stable while stocks have continued to fall.
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Bitcoin has been on a tear since June, recently breaking away from stocks. Stocks continue to experience a rough week, having fallen 3,8% since Friday. Two years of gains have been erased in the traditional sector and markets have turned around following OPEC's decision to cut oil supply by more than two million barrels per day compared to what was planned.
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All of this could fuel inflation and strain the Fed's position as interest rates are expected to rise to 4% in the markets. If this decision is made in November, it will mean a rapid increase in just a few months, which may generate even more concern about the stability of the financial and banking system, which will mean a macroeconomic movement in two different directions for bitcoin: first, as an alternative to the traditional banking and financial system and second, as an alternative similar to stocks in terms of disposable income and growth.
Bitcoin is an asset characterized by volatility during the first part of its history, especially considering traditional financial markets used to be much more stable.
However, this has recently begun to change, as the asset has begun to consolidate around $20,000 over the past few months. In a more turbulent environment for stocks, bitcoin has maintained its stability and many investors in all regions of the world are turning to this asset as a form of hedging against sudden price changes.
According to experts, “this latest Bitcoin milestone highlights the increasingly mature nature of this asset” and “when it matures and becomes more widely adopted, it will become a less volatile asset that can be traded like traditional assets.”
