Bitcoin, Volatile? No, It’s Actually The Dow Jones Now That Is – Here’s Why

Bitcoin maintains a limited trading range between $18,985 and $19,675 during the weekend. The alpha cryptocurrency has just lost its $20k handle. Sunday’s data from Coingecko indicates that BTC is currently trading at $19,499, an increase of 1% over the last week.

However, it is not Bitcoin’s narrow trading range that is making a little bit of ruckus down at Wall Street. It is Bitcoin getting less volatile than the Dow Jones Industrial Average that is.

In recent months, BTC has been trading in conjunction with equities. Both asset classes have been susceptible to prevalent macroeconomic forces, including surging inflation and rising interest rates.

Nevertheless, Bitcoin’s volatility looks to be dropping relative to traditional stocks, as the world’s largest crypto asset demonstrates signs of independence from equities.

The Fed finally did it, they broke the market:

the dow jones (30 largest industrial stocks on planet earth) is officially more volatile than bitcoin pic.twitter.com/BfveiMYZy2

— zerohedge (@zerohedge) October 7, 2022

Bitcoin Loses Its Volatility To Dow Jones 

As of October 7, according to data provided by ZeroHedge, the Dow Jones Index was more volatile than BTC.

The Dow Jones Industrial Average decreased 630.15 points, or 2.1%, to reach 29,296.78. The S&P 500 index declined 2.8% to 3,639.65. The Nasdaq Composite fell 3.7% to 10,652.40, which is less than 1 percent above its yearly low.

The DJIA is a stock market index that follows 30 of the largest publicly traded companies on the New York Stock Exchange and Nasdaq. The Dow Jones, often known as the Dow 30, is named after Charles Dow, who along with Edward Jones devised the index in 1896.

Image: Vox
Crypto Becomes More Stable As It Matures

As Bitcoin has grown in popularity, its volatility has lessened. Institutional capital inflows have also contributed to the top cryptocurrency’s relative stability as compared to its early years of popularity.

Stock portfolios are wiped out and commodity prices plummet as a result of a strong US dollar. Bitcoin, however, has been one asset that has remained quite constant throughout the past weeks. Gains of 6.5% for the cryptocurrency have caught the eye of market participants, both bulls and bears.

Image: BTC VS Dow Jones Volatility | Zerohedge

Bitcoin’s most recent accomplishment exemplifies the crypto asset’s progressive character given its designation as one of the most volatile assets. Interestingly, proponents have asserted that as Bitcoin reaches maturity, which is defined by higher acceptance, the asset will be less unstable and trade similarly to other assets.

Meanwhile, Bitcoin’s volatility has decreased due to a strong US dollar, which has caused global fiat currencies to lose value relative to the greenback. Together, the rising dollar and declining commodity prices may have a negative effect on stock portfolios.

BTCUSD trading pair at $19,510 | Featured image from Finance Magnates, Chart: TradingView.com