Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market capitalization, have experienced a significant decrease in long-term volatility, reaching their lowest levels in over two years, according to research conducted by Kaiko.
Historically, ETH has been known to exhibit higher levels of volatility compared to BTC. However, the gap between their respective volatilities has narrowed significantly. Currently, BTC’s 180-day volatility stands at 46%, while ETH’s hovers around 50%. Although both cryptocurrencies have been on a downward volatility trend, their levels of volatility still remain nearly twice as high as those of traditional risk assets like technology equities.
The decreasing volatility in BTC and ETH is noteworthy, considering that the cryptocurrency market has historically been characterized by sharp price swings and unpredictable fluctuations. The lower volatility could signify a maturing market with a more stable price trajectory, potentially fostering greater trust and confidence among investors.
While the overall volatility has decreased, it’s essential to highlight that the cryptocurrency market remains inherently more volatile than traditional assets. This volatility can present both opportunities and risks for traders and investors, depending on their risk appetite and investment strategies.