Is Bitcoin More Volatile Than Stocks?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Bitcoin, the representative cryptocurrency. There is a perception that cryptocurrencies have high volatility and exhibit steeper fluctuations than other risky assets such as stocks. However, a comparison of the prices of Tesla and Apple, leading Nasdaq tech stocks, and Bitcoin over two months revealed that Bitcoin's volatility was actually lower.

On the 11th, Asia Economy summed the rate of change in Tesla's stock price from August 1 to October 10 this year, which showed -21.38%. Meanwhile, the total rate of change in Bitcoin prices traded on Upbit, Korea's leading cryptocurrency exchange (as of 9 a.m.), was confirmed to be -9.19%. Amid a downturn in the Nasdaq index, Tesla stock, and the coin market due to high inflation and concerns over Federal Reserve (Fed) tightening, Tesla's cumulative rate of change was more than twice that of Bitcoin. Tesla's stock price, after a 3-for-1 stock split on August 25, was $140.42 (approximately 200,000 KRW) as of the 10th, while Bitcoin's price was recorded at 27.4 million KRW. During the same period, Apple, another leading Nasdaq stock, recorded -13.42%, showing greater volatility than Bitcoin.

Days with volatility exceeding 5% were also more frequent for Tesla. During the 50 days the Nasdaq market was open in that period, Tesla's stock price rose or fell by more than 5% on 4 days (8%). In the always-open coin market, Bitcoin recorded volatility exceeding 5% on 3 days (4.23%) out of 71 days. Both the number and frequency of days with over 5% volatility were higher for Tesla. Additionally, days with volatility between 3% and 5% were 10 days for Tesla and 7 days for Apple, which were 8 and 5 days more than Bitcoin's 2 days, respectively. Days with less than 1% change were more frequent for Bitcoin (39 days) compared to Tesla (15 days) and Apple (24 days).

However, Bitcoin showed a larger single-day price fluctuation than Tesla and Apple. Tesla's largest daily change since August was on the 3rd of this month, closing at -8.61%. Apple closed at -5.87% on the 13th of last month. Bitcoin's daily price change recorded -9.59% on the 19th of last month.

Professor Hong Ki-hoon of Hongik University's Department of Business Administration explained, "The past two months have not been favorable for tech stocks. Due to the Fed's interest rate hikes, liquidity has decreased, and tech stocks, which had risen significantly and rely on expectations, seem to have been more heavily affected."

This content was produced with the assistance of AI translation services.