Many people are criticizing the volatility of Bitcoin and other cryptocurrencies. But many of them have no idea that stocks can be much more volatile.
Let’s take a look on which stocks are more volatile than Bitcoin.
How volatility is measured
Volatility is the rate at which an asset’s value or rate of return fluctuates. It is measured over a given period of time. However, for investors and traders, it is a powerful tool that can predict the rise or fall in the price of an asset.
You can often hear that cryptocurrencies can be very volatile. For many people, this is one of the reasons why they do not invest in cryptocurrencies. However, it should not be taken wrong which many people do. It can give us valuable information about future developments.
Tesla shares are more volatile than Bitcoin
In recent months, Tesla shares have been more volatile than Bitcoin. Following data from the end of June, Bitcoin had daily movements of around 1.25% in 14 of 27 days, which is almost 52% of the time. At the same time, Tesla recorded this movement only at 6% of the time.
Tesla shares rose tremendously during the COVID-19 pandemic. However, the month-on-month decline in shares is 18%, which is 6% more than the price drop in BTC.
Bitcoin volatility has stabilized at around 55% in the last 30 days. However, the implied volatility fell to 44%, which is at least in 2 years. Historically implied volatility below 50% suggested large market movements. Maybe this is a sign we can expect big movement in the market.
We will see what the future brings us and how prices will develop. In any case, it is important to know that cryptocurrencies are not necessarily the most volatile assets. And volatility thus should not be a reason for not investing in cryptocurrencies. It’s safe to invest in cryptocurrencies. All you need to do is study, gather information and invest only as much as you can afford to lose.
By the way you can now drive a Tesla car, as it is one of the partners of Platon Finance.