Will Bitcoin continue to shed its temperamental nature as it matures? For one, it’ll make for less entertaining headlines, which is probably not a bad thing if you’re an investor. Writes Apollo Sande, Country Manager for Luno Kenya.
In recent years, Bitcoin has occasionally shown lower volatility than some leading technology stocks, challenging the long-standing narrative of unpredictability. This reputation, while once accurate, largely stems from Bitcoin’s early years, when the market was small and dominated by retail traders and speculative flows.
According to Fidelity’s 2024 research, between 2022 and 2024, Bitcoin was less volatile than Netflix (NFLX) and several other major S&P 500 constituents. Over a 90-day period, Netflix’s realised volatility averaged 53%, compared with Bitcoin’s 46%. In fact, Bitcoin displayed lower historical annualised volatility than 33 of roughly 500 companies in the index.
That’s a far cry from 2014, when Bitcoin’s annualised volatility often exceeded 200%, largely driven by crypto-specific events rather than macroeconomic factors.
This evolution highlights Bitcoin’s maturation into a legitimate financial asset. Institutional participation has increased liquidity, attracted long-term capital, and moderated price swings. It has also paved the way for deeper integration with traditional finance- through instruments such as exchange-traded funds (ETFs). Meanwhile, crypto platforms like Luno have made it easier for investors to participate in this evolving market safely, providing access, education, and tools to navigate Bitcoin’s complexities responsibly.
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Generally, investors exhibit a cognitive bias towards stocks. Investors may perceive Bitcoin as excessively volatile when benchmarked against the S&P 500, which it is, but indices are designed to dampen volatility through diversification, while concentrated positions in single stocks like Tesla, NVIDIA, or Netflix can show comparable or even higher price swings than Bitcoin.
Gold, the quintessential safe-haven asset, is known for price stability and capital preservation. Its 10-year annualised volatility has historically hovered around 13–15%, compared with Bitcoin’s 70–90% over the same period. But gold, as a financial asset, is thousands of years old. In the early 1970s, around the birth of modern gold trading when prices floated based on supply, demand, and investor sentiment, its volatility spiked to roughly 80%. Bitcoin, by comparison, is just entering its teens, now in its sixteenth year of existence.
A more recent analysis by crypto research firm Block Scholes found Bitcoin’s two-week realised volatility in September at historical lows below 20%, with a yearly average of around 42%, not far off some of the biggest S&P 500 stocks, and considerably less than others in the index. Will it continue to shed its temperamental nature as it matures? For one, it’ll make for less entertaining headlines, which is probably not a bad thing if you’re an investor.
Visit Luno to explore more investment opportunities.
*This information should not be construed as financial advice or as a solicitation to trade. All opinions and information provided are for informational purposes only.
