In recent months, Bitcoin (BTC) has moved in tandem with equities, as both asset classes have been affected by the same macroeconomic issues, including soaring inflation and interest rate rises. However, Bitcoin’s volatility looks to be cooling down relative to traditional stocks as the leading cryptocurrency exhibits symptoms of decoupling from stocks.
According to ZeroHedge, the Dow Jones index that monitors the 30 top industrial firms was more volatile than Bitcoin as of October 7.
Bitcoin’s most recent accomplishment exemplifies the asset’s maturing character, given its classification as one of the most volatile assets. Notably, proponents have asserted that as Bitcoin reaches maturity, the asset will be less volatile and trade similarly to other assets.
Bitcoin’s historical volatility
Bitcoin has a history of volatility, whereas traditional financial markets are often far more stable. However, the change in volatility may be ascribed to Bitcoin’s decline from its all-time highs, leading to the asset consolidating around $20,000 over the past several weeks.
In this instance, the level is a temporary bottom for Bitcoin after an incredible bull run that ended in a record-breaking high of around $68,000 in late 2021.
In the wake of a strong dollar, which caused global fiat currencies to lose value relative to the U.S. dollar, Bitcoin’s volatility has fallen. In this line, a rising dollar may negatively influence stock portfolios since the commodities price decline.
Nonetheless, Bitcoin has maintained its stability, with investors in certain places resorting to the asset as a hedge against soaring costs.
Bitcoin continues to consolidate below $20,000 as bears and bulls vie for dominance. The asset is trading at $19,500, a loss of less than 1% in the previous twenty-four hours.
