The Bitcoin Market is Now Less Volatile Than the Oil Market

• Bitcoin is usually the most volatile asset class, but oil has recently far surpassed Bitcoin’s volatility

Over the last decade Bitcoin has typically been the most volatile asset class. However, since December the volatility of oil has been surging, and recently the volatility of West Texas Intermediate crude oil surged to 119.6%, while Bitcoin’s volatility was simultaneously as low as 42.3%.

Volatility is calculated from the standard deviation of price movements, and is therefore a measure of how much a price is varying from its long term average. It seems the cause of oil’s rapidly fluctuating price is tensions between Iran and the United States, followed by major economic movements due to the Coronavirus pandemic.

Bitcoin having far less volatility than oil could be considered a sign that the Bitcoin market is becoming more mature. That being said, Bitcoin still has a long way to go before it becomes less volatile than the S&P 500 or gold, which currently have volatilities of 15.6% and 12.2% respectively.

 

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