Now Bitcoin is as Volatile as Biggest Tech Stocks
Since the Dow Jones Industrial Average offer investors other roller coaster ride of volatility these days, Bitcoin meanwhile has been showing stability recently with small changes in price in the last some hours, falling simply 0.77%, even the Dow is down 100 points. Dependent on the 20-day historical volatility metric, the leading cryptocurrency is right there with the top tech online giants, for example, Netflix, Apple, and Amazon.
For the majority, Bitcoin as a stable investment is a belief that is a long-way fetched, especially after its surge in late 2017 to $20,000 and its succeeding fall in value by as much as 70% in this year. Moreover, its movement lately has been on par with the tech stocks that helped to fuel the historical bull market run.
A senior instructor at the Options Institute at Cboe, Kevin Davitt wrote, “A one standard deviation move for Bitcoin currently is around $475.” “That works out to +/- 7.3% (475/6500). Compare that to the year beginning (Mid of January) when Bitcoin was around $11,000. Back then the standard deviation measured $4640 or +/- 42%.
Since the decreased volatility might stave off short-term dealers for price action, it might be a welcome thought for legacy investors fixed to a purchase and hold strategy. Obviously, for long-term Bitcoin purchasers, this might be viewed as a positive as price stability would attract more investors.
Davitt wrote, “Possibly, we are witnessing the market maturation. It’s far too early for declaring this “new normal” yet the continual variety over the last few weeks may be hinting at a structural shift.”
Fidelity Jumping Into the Crypto Space
Fidelity is stepping into the virtual currencies game as 72-year-old investment organization with over $7.2 trillion in client assets that is introducing Fidelity Digital Asset Services, LLC which will provide enterprise-quality custody and trade implementation services for virtual currencies to sophisticated institutional investors like hedge funds, market intermediaries, and family offices.
Since the new organization won’t cater to the retail investors, it is still a step forward for virtual currencies like Bitcoin and other cryptocurrencies are struggling to benefit wider public adoption.