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With the crash of cryptocurrency prices and the arrival of a new so-called crypto winter, many companies in the industry are facing a liquidity crisis.
Artur Widak | Nafoto | Getty Images
Bitcoin’s price has stalled recently, but there is one good thing to come out of it for investors betting that cryptocurrencies will become a legitimate asset class.
Bitcoin volatility is now lower than both the Nasdaq and the S&P 500 after hovering at $19,000 levels for more than a month, according to Kaiko.
Data providers said Friday that the cryptocurrency’s rolling 20-day volatility has fallen below that of stock indices for the first time since 2020. This is welcome news for many long-time cryptocurrency investors who hope that the easing of the cryptocurrency’s notorious price volatility will ease concerns for potential new investors.
Kaiko also said that the gap between 30-day and 90-day volatility between Bitcoin and equities has narrowed since mid-September, despite Bitcoin’s increased sensitivity to macroeconomic data releases. (Although bitcoin’s correlation with equities has eased, it remains high, and its price continues to be driven by macro themes.)
While bitcoin volatility is at its lowest level in years, equity volatility remains at its lowest level since July, Kaiko head of research Clara Medalley told CNBC. Equity markets have certainly been volatile over the past few months due to high inflation, a strong dollar, rising interest rates, ongoing wars and an energy crisis. Equity markets, on the other hand, remain very sensitive.
Bitcoin fell below the $19,000 level on Friday as the 10-year US Treasury yield hit its first peak in 14 years following a brief surge in the dollar index. It bounces back a bit and then crosses the flat line.
According to Coin Metrics, Bitcoin price fell less than 1% to $18,966.00. Earlier in the day, it fell to $18,677.50. Ether also dropped slightly, trading at $1,283.80 after finding an early low at $1,254.80.
US 10-Year Treasury Bond Yield on Friday Up to 4.308% It cut rates for the first time since 2008, but did so after reports that some Fed officials were concerned about tightening rates too much. The Dollar Index has also lost most of its gains after briefly rising to a high of 113.906.
The two largest cryptocurrencies by market capitalization are on pace to post a week of declines and three consecutive negative weeks. Historically strong month for cryptocurrency returnsFor the month, Bitcoin and Ether are down about 1% and 3% respectively.
Yuya Hasegawa said: “This week saw signs of a slowdown in inflation as demand in the housing market declined, but the market remains very cautious ahead of next month’s FOMC meeting and is more cautious about raising interest rates. It ignores economic data that could justify its approach.” , a cryptocurrency market analyst at the Japanese cryptocurrency exchange Bitbank.
“We won’t see much movement until the meeting,” he added. But the area around $19,000 will continue to support the Bitcoin price.
CNBC’s Christina Cheddar Berk contributed to the report
