{"id":49539,"date":"2023-08-17T07:40:24","date_gmt":"2023-08-17T11:40:24","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/bitcoin-and-ethereum-are-now-less-volatile-than-ethereum-amid-dwindling-liquidity\/"},"modified":"2023-08-17T07:40:27","modified_gmt":"2023-08-17T11:40:27","slug":"bitcoin-and-ethereum-are-now-less-volatile-than-ethereum-amid-dwindling-liquidity","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=49539","title":{"rendered":"Bitcoin and Ethereum Are Now Less Volatile Than Ethereum Amid Dwindling Liquidity"},"content":{"rendered":"
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Bitcoin (BTC<\/u>) and Ethereum (ETH<\/u>) are now slightly less volatile than oil as both assets continue to trade sideways this summer.<\/p>\n

According to new research<\/u><\/a> from Kaiko, the notorious trend of cryptocurrency volatility has taken a sharp decline due to several factors ranging from government policies to wider macroeconomic factors.<\/p>\n

The slowed volatility change in the top two digital assets has now seen it drop to \u201cmulti-year lows, slightly below oil prices.\u201d\u00a0<\/i><\/p>\n

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Bitcoin\u2019s 90-day volatility index stands at 35% while Ethereum is slightly higher at 37%. The global oil price 90-day volatility index sits at 41% creating a new trend described by Dessialava Ianeva, a lead analyst at Kaiko as \u201cunusual.\u201d\u00a0<\/p>\n

Historically BTC and ETH have remained more volatile than oil and other assets although the trend in the last three months shows the asset hovering around the $30,000 mark.<\/p>\n

Known for its volatility, last year BTC and ETH lost over 55% of their market values following a rocky patch<\/u> in the woods for the entire ecosystem.\u00a0<\/p>\n

As this year marks new beginnings, the price of BTC has surged 80% year to date (YTD) recording another huge leap in volatility.\u00a0<\/p>\n

Per the research, oil tops multiple assets evaluated by Kaiko from crypto, gold, and tech-driven Nasdaq. Even so, the volatility index of oil has fallen in the past twelve months as it stood at 63% in July 2022.\u00a0<\/p>\n

Market volatility is the degree or frequency of change in the price of an asset over a period of time. Risky assets are often characterized by high volatility as they swing faster, opening investors to higher risks.<\/p>\n

Wider macroeconomic factors and market trends<\/h2>\n

Analysts at Kaiko cite the geopolitical tension characterized by Russia\u2019s invasion of Ukraine leading to global sanctions and China\u2019s poor reopening after economic gripping Covid measures.\u00a0<\/p>\n

Ianeva also stated that Bitcoin\u2019s volatility reduced as \u201cthe asset continues to mature.\u201d <\/i>As more adoption trickles into the market, it becomes less volatile compared to its formative years.<\/p>\n

Finally, the research highlighted liquidity as another on-chain factor behind the drop in volatility. Ianeva explained that for the past few months, leading assets like BTC, ETC have recorded lows in terms of trade volumes and liquidity.\u00a0<\/p>\n

With the recent regulatory crusade in the US market, investors have become a little skeptical<\/u> of the direction of the Securities and Exchange Commission (SEC) in approving a spot BTC ETF.\u00a0<\/p>\n

On the bright side, the approval of a spot ETF though months away, could turn the tide pushing the price of BTC and the general market capitalization to new highs.<\/p>\n<\/p><\/div>\n