Bitcoin volatility hits lowest level in more than a decade in 2023
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In 2023, Bitcoin will break its historical volatility trend.
According to a report by Ecoinometrics, 2023 marks a clear change in Bitcoin’s volatility pattern.
Specifically, compared to the previous decade, Bitcoin has experienced unprecedented stability this year, with volatility constantly fluctuating between 20% and 40%. At the same time, operating performance has also grown strongly, with year-to-date profit growth exceeding 110%.
Bitcoin remains resilient in the face of global instability
Notably, BTC recently reached its highest level of the year – $36,000 before correcting to $34,600 at the time of writing.
Additionally, the reported decrease in Bitcoin volatility includes both realized and implied volatility.
- Realized Volatility: An indicator of actual price changes that shows a consistent downward trend.
- Implied volatility, a predictor of future market unpredictability, also declined.
Implied and realized volatility. Source: Glassnode
This superior stability combined with reliable performance results in Bitcoin having a higher Sharpe ratio.
As a measure of risk-adjusted performance, a higher Sharpe ratio indicates a higher return for each unit of risk an investor takes. Essentially, Bitcoin investors will be rewarded more in 2023, getting the most bang for their buck with significantly lower volatility than in previous years.
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