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  • In 2022, Bitcoin was 26X more volatile on a weekly basis than the euro, up from 19X in 2021 and 16X in 2020.
  • The data suggests that while Bitcoin’s volatility has come down since 2015, it has not improved since then.
  • Bitcoin’s average volatility is significantly greater than other assets such as the Nasdaq and individual stocks.

Analyzing Bitcoin Volatility

Bitcoin and its accompanying volatility have been likened to two leads in a rom-com. They may take some time apart intermittently, but you know that they will inevitably get back together before long. To assess whether this situation is getting better or worse, CoinJournal.net set out to analyze the realized volatility of Bitcoin over time.

Realised Volatility Analysis

The analysis began by charting the realised volatily of Bitcoin over a rolling 30-Day window – an assessment of the magnitude of the movement. The results showed that while Bitcoin was all over the place until 2015 – which is not surprising given its niche status at this point – its liquidity had decreased since then. A closer inspection revealed that while there may be signs of calming down during the latter half of 2021, 2022 and start of 2023, there has been no improvement in stability since 2015.

Comparing Returns with Other Assets

When compared with other assets such as Nasdaq or individual stocks, Bitcoin’s average volatility was significantly greater; 26X more than the euro last year alone. This highlights one major challenge hindering adoption: its excessive price swings are simply too dangerous for investors who want to protect their capital from significant losses.

It appears that despite much optimism about decreasing levels of bitcoin volatility, it has not actually improved since 2015 and continues to dwarf returns from traditional investments like stocks or indices. While this could be a sign that cryptocurrency is still very much in its infancy when it comes to mainstream adoption and acceptance, only time will tell if things can improve further down the line

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