For much of its nearly 17 years on the market, bitcoin has been viewed as a volatile asset. The largest cryptocurrency’s history is chock full of dramatic price swings in both directions and extended periods of turbulence.
However, that condition isn’t a permanent affliction. In fact, bitcoin volatility is waning. And that could be good news for spot prices and ETFs like the Coinshares Valkyrie Bitcoin Fund (BRRR). Whether it’s by way of direct ownership or via an ETF like BRRR, investors would love to take the bumps out of their bitcoin rides. The digital currency is obliging.
“The largest cryptocurrency’s three- and six-month rolling volatility, meaning the speed and extent of its price changes over those time periods, has fallen to a historically low level. This trend has continued even as bitcoin’s price set new record highs in May, July, and August,” reported David Hollerith for Yahoo Finance.
Why Lower Bitcoin Volatility Matters
When bitcoin was younger, it wasn’t just retail investors that were chastened by the digital currency’s wild swings. Many professional money managers simply stayed away. That was because bitcoin’s price swings far exceeded those of other asset classes. However, a new era is dawning and it could be to the benefit of HOLDers and BRRR investors.
“However, the range of its swings has been [narrowing. And] a key factor has been the launch of new bitcoin-related financial products like futures contracts and exchange-traded funds that have brought in more investor groups,” added Yahoo Finance.
