Bitcoin almost as volatile as Nvidia: BTC calms down, but remains risky

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The criticism of instability addressed to Bitcoin retains a numerical basis. With a volatility of 38%, its variations remain approximately eight times greater than those of EUR/USD and three and a half times higher than those of the S&P 500. Compared to gold, the gap is less marked, but remains significant.

This indicator measures the dispersion of price variations observed over the last 90 days, then reduces it to an annual scale. It does not predict Bitcoin's return or its maximum loss. A volatility of 38% therefore does not mean that the price must rise or fall by that much over the year.

The comparison with Nvidia nevertheless provides a concrete benchmark. Over the period studied, the movements of BTC have an amplitude comparable to those of a major technological action. Bitcoin remains risky, but its level of volatility no longer appears exceptional compared to certain listed securities.

This proximity does not make the two placements equivalent. Nvidia has a strong business, earnings, and growth prospects. Bitcoin depends on other factors, including demand, liquidity conditions and trust in its network. Similar volatility does not mean that their prices move systematically together.

The development of financial infrastructure constitutes a possible explanation for this moderation. Spot ETFs allow you to invest from a traditional securities account, while options and futures offer more ways to hedge a position.

An investor can thus keep his bitcoins while purchasing protection against a decline. Other players sell these protections and collect a premium. This activity contributes to structuring the market, but its influence on prices depends on the positions taken and the associated hedging.

However, institutionalization does not guarantee stability. ETFs also record withdrawals, and derivatives allow you to accumulate leverage. When the market turns, liquidations can amplify movements instead of cushioning them.

The question of the store of value therefore remains open. A limited supply does not guarantee a stable price, especially for a holder likely to sell in the short term. Historical performance is also not enough to ensure future appreciation.

The observation remains more measured: over these three months, Bitcoin presents a fluctuation profile close to Nvidia, while remaining significantly more unstable than gold, major American stocks taken together and the euro-dollar. A less atypical asset, but still demanding for its owners.

An editorial article. Le Journal du Coin, the first French-speaking news media on cryptocurrency, Bitcoin, and blockchain protocols.

Machine-translated from French