Most often, Bitcoin is criticized precisely because of its strong volatility. As John Williams, president and CEO of the Federal Reserve Bank of New York, noted in April 2018, “volatility makes Bitcoin and other cryptocurrencies an unstable repository of value. This prevents it from being used as a payment tool. ” However, over the past year Bitcoin has shown amazing stability. At the same time, the dynamics of cryptocurrency was even better than many fiat currencies.
The 30-day and 60-day Bitcoin volatility indexes against the US dollar are 2.6 and 2.41 percent, respectively. Moreover, the volatility of the national currencies of other developed countries against the dollar is even higher than that of Bitcoin.
Fiat volatility index versus US dollar. Source: tratesfx.com
The British pound, the euro, the Canadian dollar, the Indian rupee and the Japanese yen are all currencies of the leading economies of the world. At the same time, their volatility index versus the dollar averages 2.86 percent, which is higher than Bitcoin. It turns out that the dominant cryptocurrency has become not only more stable, but it also gives better results than most fiat currencies.
BTC Volatility Index March 18-19
At the same time, Bitcoin volatility was quite low last year. As can be seen in the above chart, Bitcoin volatility did not exceed 6 percent for almost the entire year.
Calm before the storm?
However, in the past few weeks, the crypt market can hardly be called stable. Soon, Bitcoin can be expected to enter the high volatility range. However, in the long term, the amplitude of the jumps should decrease due to the growth of acceptance around the world.
