Here’s How Bitcoin is the Least Volatile Crypto Asset

Bitcoin is less volatile than its cryptocurrency cousins, according to research that looked at five crypto assets from 2013.

In February, the American Institute for Economic Research (AIER) compared the volatility of Bitcoin to traditional fiat currencies. It found that the average daily price change of Bitcoin with the U.S. dollar exchange rate against the pound, the euro, the yen, and gold was six times higher than the aforementioned fiat currencies and gold between 2016-2017.

At the time, the authors of the research wrote:

“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.”

Now, over four months later, the AIER has said that Bitcoin is less volatile compared to Ethereum, Ripple, Bitcoin Cash, and Litecoin. The independent voice for sound economics looked at data from CoinMarketCap from 28th April 2013 until 4th June, 2018.

“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,” said Max Gulker, PhD, who penned the AIER article.

According to the research, Bitcoin reached its lowest average daily price movement in 2016, at two percent. It then rose to levels not seen since 2013 when it increased to the four percent mark. Compared to Bitcoin, though, the other cryptocurrencies show a much more volatile start when trading began.

For instance, Ethereum’s average daily price movement was roughly four percent higher than Bitcoin’s in 2015. In 2017, this had dropped to around one percent, partly due to an uptick in Bitcoin’s average daily price movement. Notably, though, it wasn’t until the first part of 2018 when the five cryptocurrencies were close together.

The research also looked at the number of days per year each crypto asset saw a price change of 10 percent.

Of the five, Bitcoin Cash averaged more than one day per week with a change greater than 10 percent. This is compared to Bitcoin, which recorded less than 20 days since 2013. Granted Bitcoin Cash has only been around for less than a year, which could be a factor playing against it.

However, compared to the others, Bitcoin is seen as more of a stable currency with less wild price swings. But, as Gulker notes, this could change over time. Notably, though, not even hacks such as the recent Bithumb crypto exchange theft could keep Bitcoin’s price down for long.

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