Cryptocurrencies have long been the focus of trillion-dollar giants and are in a much better position than years ago. Even though the regulation phase is painful, when comprehensive global rules are shaped, investors will be able to breathe easier. So, what details are included in the latest cryptocurrency report by trillion-dollar asset manager Fidelity?
Fidelity Cryptocurrency Report
Over the past year, Bitcoin (BTC) volatility remained behind many assets. As of May 11, Bitcoin’s 1-year realized volatility was around 44.88%, while for Tesla, Meta, and Nvidia, this percentage was over 50%. Does the lower volatility compared to major tech companies‘ stocks indicate a trend towards being a more stable asset?
Actually, this is a periodic thing, and outside of consolidation periods, Bitcoin’s price experiences rapid falls and rises, so it hasn’t lost much of its volatility.
Fidelity Investment’s report mentions that Bitcoin showed lower volatility compared to 33 of the approximately 500 companies in the S&P 500 index.
“Considering the 90-day realized historical volatility figures, in October 2023, Bitcoin had less volatility than 92 of the S&P 500 stocks. Some of these stocks are also large and mega-cap stocks.”
Bitcoin and Gold
The volatility model of the king cryptocurrency in recent times shows performance consistent with its early days when compared to Gold. Gold also experienced high volatility in its first trading years, which gradually decreased thereafter. In 1971, Gold was decoupled from the US dollar, and after the legalization of its private ownership in 1974, it rose along with inflation. In the 1970s, volatility exceeded 80%, roughly twice that of today’s BTC volatility.
Fidelity researcher Zack Wainwright states;
“This situation might indicate an increasing belief that Bitcoin is maturing, which could be accelerated by the approval of a few spot Bitcoin exchange-traded products in the US. Bitcoin was nearly half as volatile in 2024 at $60,000 compared to 2021. Putting all these together, a thesis is beginning to emerge that points to Bitcoin’s increasing acceptance due to potential maturation.”
