Bitcoin Volatility: Is it Getting Better or Worse?

• The article discusses the volatility of Bitcoin, which has been increasing over the last few years.
• When comparing Bitcoin’s returns to other assets like the Nasdaq and individual stocks, it is much more volatile.
• Data shows that while Bitcoin was more volatile until 2015, there has not been any improvement since then.

Realised Volatility

Bitcoin’s volatility has been on a roller coaster ride since its inception in 2009. We can chart this volatility using realised volatility, which looks at the magnitude of movement by looking at a rolling 30-Day window. Data from before 2015 is hard to put any weight into as Bitcoin was still a niche Internet currency few had heard of, and its liquidity was minimal. However, when zooming in on data from 2015 onwards it does look like Bitcoin may be calming down somewhat in the latter half of 2021, 2022 and start of 2023.

Comparing Returns

When comparing Bitcoin’s returns to other assets such as the Nasdaq or individual stocks it blows them out of the water with regards to volatility. Last year saw an average weekly volatility versus USD which was 26X greater than the euro, up from 19X in 2021 and 16X in 2020. This suggests that while things have gotten better since 2015 they have not improved enough for investors to start trusting cryptocurrency markets with their money yet.

A Major Problem

The issue here is that while there is a perception that things are getting better with regards to Bitcoin’s volatility – this isn’t backed up by data. This presents a major problem for those hoping for wider adoption of cryptocurrencies into mainstream finance as high levels of price swings make them difficult to trust or use as a store of value or form or payment system for everyday transactions due to lack of stability.

Regulation Could Help

One potential solution lies in increased regulation; something that would likely need input from both financial authorities and governments around the world if it were to become reality – something easier said than done given how many potential pitfalls could arise in this area given how new cryptocurrencies are compared to traditional finance markets..


In conclusion it appears that while there may be signs that Bitcoin’s volatility is coming down somewhat they are not significant enough yet for it too be considered trustworthy by mainstream investors who prefer stable investments with lower risk profiles – something which stringent regulation could help address but will take time to implement correctly due to its complexity and novelty within global finance markets