Is Bitcoin the least volatile Crypto Asset?

By August 4, 2018 No Comments

Bitcoin seems to be more stable than other digital currencies according to analysis on five other digital assets for the past five years.
Bitcoin Is More Consistent than its peers
The American Institute for Economic Research (AIER) published a comparison study on the volatility of Bitcoin vs that of conventional fiat currencies. It concluded that the daily price delta on average of Bitcoin paired with the USD when compared with the Pound (GBP), Euro (EUR), Yen (JPY) and Gold was six times more than the above discussed fiat currencies and gold between 2016 and 2017.
When published, the author of the report said:
“A medium of exchange that is stable in value and highly liquid, so someone can trade it in a pinch without taking a hit, allows us to better deal with uncertainty and helps us plan and coordinate into the future. Assets that are too volatile are therefore undesirable as currencies.”
Recently, the AIER has issued a statement saying that Bitcoin is more stable than Ethereum, Ripple, Bitcoin Cash and Litecoin. They used CoinMarketCap’s data for a five year period between 2013 and 2018.
Max Gulker, a PhD who wrote the AIER report said “While all five cryptocurrencies we study are still quite new, measures of volatility, and changes in those measures over time, are important in assessing their potential future viability as money.”
As per the report, Bitcoin achieved its most stable daily price movement of 2% in 2016. This was followed by a rise of 4% which had not been observed since 2013. The other digital currencies displayed a far more volatile price delta when they were first traded.
For example, Ethereum’s daily average delta in price was found to be higher than Bitcoin’s by about 4% in 2015. This dropped to close to 1% in 2017 primarily because of an upturn in Bitcoin’s daily average movement in price. It is interesting to note that the five cryptocurrencies first came close together in terms of daily average price movement only in the first part of this year.
Is Bitcoin a Reliable Digital Asset?
One additional area that the report touched upon was the number of days in every year that each cryptocurrency experienced a movement in price of 10%.
Among the five cryptocurrencies being discussed, Bitcoin Cash on average experienced a price delta greater than 10% more than one day every week. Bitcoin, in comparison, experienced this less than 20 days in total since the year 2013. It is true that Bitcoin Cash has only been in existence for under a year and so is bound to be more volatile than its older peers.
However, Bitcoin is the more stable cryptocurrency than the others discussed as it has minimal swings in price. Gulker does bring it to our attention however that this can change at any point. It is worth noting however that even hacks like the recent Bithumb cryptocurrency exchange robbery was unable to suppress Bitcoin’s price for too long.

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