RT Journal Article
SR Electronic
T1 Misperceptions of Bitcoin Volatility
JF The Journal of Alternative Investments
FD Institutional Investor Journals
SP 33
OP 44
DO 10.3905/jai.2022.1.153
VO 24
IS 4
A1 Mieszko Mazur
YR 2022
UL https://pm-research.com/content/24/4/33.abstract
AB Bitcoin market capitalization recently surpassed $1 trillion. While popular belief holds that a key characteristic of bitcoin is its excessive volatility, this article provides evidence that this is largely a misperception. We show that bitcoin return fluctuations are lower than those of roughly 900 stocks in the S&P1500 and 190 stocks in the S&P500. Moreover, we find that bitcoin is less volatile than commodities such as oil and silver, US Treasuries, AAA-rated corporate bonds, EU carbon credits, and some of the most popular technology and media stocks, including Apple, Twitter, and Netflix. Equally important, we find that during the March 2020 stock market crash triggered by COVID-19, the volatility of bitcoin was lower than that of most of these asset classes. The significant decline in bitcoin volatility over the past decade renders it more investable for conservative investors.