Bitcoin, more often then not, has been criticized because of the volatility in its price. However, a statistic that has come to light suggests a different story.
The President and CEO of the Federal Reserve Bank of New York, John C. Williams noted in April 2018 that:
“…volatility makes them [Bitcoin and cryptocurrencies] an unstable store of value and hampers their ability to be used as reliable payments for goods and services.”
The statistic shows that over the last year the stability in Bitcoin has been impressive. The digital cryptocurrency is even performing better than most FIAT currencies of the world in terms of volatility in price.
Analysis of Bitcoin Volatility Index over 30-Day and 60-Day Period
The 30-Day and 60-day Volatility Index of Bitcoin against the US Dollar are 2.6% and 2.41% respectively. Furthermore, the volatility in FIAT currencies of other developed countries against the US Dollar is higher than Bitcoin’s Volatility Index.
The British Pound, Euro, Canadian Dollar, Indian Rupee and the Japanese Yen are the currencies of the top economies of the world. Surprisingly, the 30-Day volatility in the currencies as mentioned above is more significant than Bitcoin by a mean of 2.86%. Therefore, not only has Bitcoin become more stable but it is performing better than most other FIAT currencies of the world as well.
The volatility in Bitcoin over the last year has also been very low. In the graph, the 30-Day volatility index on the yearly chart of Bitcoin is below 6% for more than 95% of the time during last year.
Calm Before The Storm?
— Weiss Ratings (@WeissRatings) March 11, 2019
Nevertheless, the stability in Bitcoin over the last few weeks has been far too low. Hence, it could be entering a region of high volatile price action in the coming weeks; still, the long-term volatility is expected to become lower and lower with time. ‘Get Rich Quick’ mentality will soon fade with Bitcoin as its adoption grows globally.
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Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com