Tesla topped recent stock volatility at 24 per cent, followed by other such companies, including bitcoin which ended at 11 per cent; other tech companies including AMD and Nvidia had 16 per cent and 12 per cent volatilities respectively while some of Amazon, Google, and Apple had lower companies at 6 per cent to 7 per cent. The ‘it’s very volatile’ canard doesn’t work for bitcoin.
Tesla had the greatest single-day price jump (21.92 per cent), and AMD had the greatest single-day price drop (-10.62 per cent). Looking at daily movements, it’s clear that bitcoin was the stable one, its movements dwarfed by those of the other assets. To some commentators, this is evidence of bitcoin’s evolution into a real asset. Its volatility has settled, they say, because of large institutional buy-ins, as well as simple market integration, and might now be a safe-haven in a new sense of the term, if not a complete stabiliser. As the cryptocurrency and equity markets become more connected, the volatility profiles of the assets involved are likely to become even more correlated or cross-collateralised.
Financial analysts are beginning to acknowledge that the high-growth tech stocks and cryptocurrencies such as bitcoin are now recognised as active components of the evolving financial system, in a more deeply integrated fashion than ever before. The future of the financial system and what is considered ‘money’ might therefore warrant a redefinition of what value and stability mean, especially if inflation and economic change are in the offing.
Source: Forbes
