The third quarter of 2019 saw a decline in Digital Assets Market capitalization. The total market capitalization fell down from its peak in July 2019 ($300bn) to nearly $200bn at the end of September. Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) which represent more than 80% of the total market capitalization displayed a significant decline in their prices owing to the fall in the total market cap. A recently released report by ExoAlpha highlights the plight of the top 3 coins and how they shaped the market in the third quarter.
A Look At Market Stats of Top 3 Coins
The third quarter saw Bitcoin price declining by 23%. Ether also suffered a sharp 38% decline. Interestingly, the volatility of the top 3 most liquid Digital Assets was lower than over the previous quarter: 75% for BTC, 69% for XRP and 83% for ETH. Even the digital assets derivatives market witnessed a key event this quarter, with the launch of the Bakkt platform on the 23rd of September 2019, the first regulated, Bitcoin futures contract physically delivered exchange, backed by the Intercontinental Exchange (ICE) exchange.
Bitcoin’s volatility was marked at 74.5% in the 3rd quarter and it reduced by 13% from the Q2. Furthermore, the volatility decreased from a high in July of 99% to a low in September at 53.6%. Over the quarter the volatility of Bitcoin has been 4 times higher than the volatility of the S&P 500 or Gold.
Ethereum displayed 82.8% volatility in the third quarter. The volatility stood at 89.7% at the end of the second quarter. During the third quarter, its volatility decreased from a high in July of 98% to a low in September at 79.4%. Over the quarter, the volatility of Ethereum has been more than 4 times higher than the volatility of the S&P 500 or Gold. Also, over the last 5 years, the volatility of Ethereum topped above 200%, in 2016 and 2017.
The volatility of XRP in Q3 was marked at 68.7%, lower than Q2 (96.4%). During the quarter, its volatility ranged between 54.9% and 76.5% with a low of 54.9% in August. Over the quarter the volatility of XRP has been more than 3 times higher than the volatility of the S&P 500 or Gold.
Bitcoin & Ethereum’s Correlation to Traditional Assets
It was also observed that while Bitcoin has not shown a correlation to traditional assets such as the S&P 500 index or Gold, its beta to these traditional assets has ranged between -2 and +3 at times.
Even, Ethereum’s beta to these traditional assets has ranged between -2 and +4 at times.
Passive Index Volatility
The volatility of the Passive Index in Q3 was fount to be at 57.7%, lower than at the end of Q2 (65.3%). During the quarter, its volatility decreased from a high of 90% in July to a low in September at 30%.
Will the leading crypto assets display more volatility trends in the Q4? Let us know, what you think in the comments below!