Bitcoin maintains a limited trading range between $18,985 and $19,675 over the weekend. The alpha cryptocurrency just lost its $20,000. Sunday data from Coingecko indicates that BTC is currently trading at $19,499, up 1% over the past week.
However, it’s not Bitcoin’s tight trading range that’s causing a bit of a stir on Wall Street. Bitcoin is less volatile than the Dow Jones Industrial Average.
In recent months, BTC has been trading in tandem with stocks. Both asset classes have been susceptible to prevailing macroeconomic forces, such as rising inflation and rising interest rates.
However, Bitcoin’s volatility appears to be decreasing relative to traditional stocks as the world’s largest crypto asset shows signs of independence from stocks.
The Fed finally did, they crashed the market:
the dow jones (30 largest industrial stocks on planet earth) is officially more volatile than bitcoin pic.twitter.com/BfveiMYZy2
— zerohedge (@zerohedge) October 7, 2022
Bitcoin loses its volatility to Dow Jones
As of October 7, according to data provided by ZeroHedge, the Dow Jones index was more volatile than BTC.
The Dow Jones Industrial Average fell 630.15 points, or 2.1%, to 29,296.78. The S&P 500 fell 2.8% to 3,639.65. The Nasdaq Composite fell 3.7% to 10,652.40, which is less than 1% above its annual low.
The DJIA is a stock index that tracks 30 of the largest publicly traded companies on the New York Stock Exchange and the Nasdaq. The Dow Jones, often referred to as the Dow 30, is named after Charles Dow, who along with Edward Jones devised the index in 1896.
Image: Vox
Crypto becomes more stable as it matures
As Bitcoin has grown in popularity, its volatility has decreased. Institutional capital inflows have also contributed to the relative stability of the top cryptocurrency compared to its early years of popularity.
Equity portfolios are being depleted and commodity prices are plummeting as a result of the strength of the US dollar. Bitcoin, however, has been an asset that has remained fairly consistent over the past few weeks. The cryptocurrency’s 6.5% gains have caught the attention of market participants, both bullish and bearish.
Image: BTC VS Dow Jones Volatility | Zerohedge
Bitcoin’s most recent success exemplifies the progressive nature of the crypto asset given its designation as one of the most volatile assets. Interestingly, proponents have claimed that as Bitcoin reaches maturity, which is defined by greater acceptance, the asset will become less volatile and trade similarly to other assets.
Meanwhile, Bitcoin volatility has decreased due to a strong US dollar, which has caused global fiat currencies to lose value against the greenback. Together, the rising dollar and falling commodity prices can have a negative effect on equity portfolios.
BTCUSD trading pair at $19,510 | Featured image from Finance Magnates, Chart: TradingView.com
