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Bitcoin Price Becoming Less Volatile than Amazon Stock: CBOE Analyst

Last Updated March 4, 2021 3:50 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:50 PM

The next time your nocoiner friends or relatives criticize your decision to allocate a (hopefully reasonable) percentage of your investments into bitcoin, you can tell them that you’ve chosen to put money the flagship cryptocurrency because you don’t have the stomach for more volatile asset classes — stocks, for instance.

Granted, that argument doesn’t have a strong historical track record, but, according to an educational analyst at the first U.S. derivatives exchange to list bitcoin futures, BTC has lately experienced less price volatility than some of Wall Street’s most popular stocks, including tech heavyweights like Amazon, Netflix, and chipmaking giant Nvidia.

Writing in commentary cited in MarketWatch , CBOE Options Institute senior instructor Kevin Davitt stated that bitcoin’s 20-day historical volatility  (HV) — i.e., the rate of change in its daily price — has dropped to 31.5 percent.

bitcoin futures price

By comparison, Amazon’s 20-day HV of 35 percent, Nvidia’s stands at 40 percent, and Netflix’s is nearly twice as large at 52 percent. At its current level, bitcoin is almost as stable as Apple (AAPL), the world’s most valuable company. Per the report, AAPL — whose market cap eclipses $1 trillion — has a 20-day HV of 29.3 percent.

Moreover, Davitt noted that even at its most volatile, the bitcoin price was far more stable than the share price of cannabis producer Tilray, the face of the pot stock bubble and an investment that short seller Citron Research called “more ridiculous than bitcoin.”

Davitt speculated that it’s possible the cryptocurrency market is maturing and that the drop in HV indicates a “structural shift” in the ecosystem. However, he cautioned that it’s “far too early” to conclude that this is the “new normal.”

“Perhaps we are witnessing the maturation of a market. It’s far too early to declare this the ‘new normal’ but the persistent range over the last few weeks may be hinting at a structural shift. Time will tell,” he wrote.

Featured Image from Shutterstock. Charts from TradingView .