Bitcoin volatility hits 2+ year low at end of 2022

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Bitcoin’s short-term volatility recently hit its lowest since 2020. (Photo by Nicolas… [+] Economou/NurPhoto via Getty Images)

NurPhoto via Getty Images

Bitcoin price movements have been rather subdued in recent weeks, and this relative calm has coincided with a specific measure of digital currency volatility hitting its lowest level in more than two years.

The seven-day annualized volatility of cryptocurrencies, determined by sourcing data from multiple exchanges, fell to 10.64% yesterday, according to figures provided by asset manager Blockforce Capital.

By falling to that level, this particular metric had reached its lowest value since July 20, 2020, according to additional data from Blockforce Capital.

The aforementioned 10.64% figure was well below the 56.85% level that Bitcoin’s seven-day annualized volatility has averaged since 2013.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Furthermore, this stands in stark contrast to bitcoin’s history of substantial price swings, which generated widespread media coverage as the cryptocurrency saw compelling increases in value followed by steep declines.

A perfect example was 2017, when bitcoin surged from nearly $1,000 to nearly $20,000, according to figures from CoinDesk.

While these compelling gains drew significant attention to the digital currency, they were ultimately unsustainable and bitcoin fell sharply the following year, additional data from CoinDesk reveals.

In 2021, bitcoin saw an impressive rise again, approaching $70,000 by the end of the year.

However, the digital asset lost much of its value again, falling to a two-year low of below $16,000 in November.

After suffering these notable losses, bitcoin price movements have been more subdued and over the past few weeks the cryptocurrency has traded between $16,000 and $17,000.

This year has been characterized by significant turbulence in the cryptocurrency space, as markets have been rocked by the failure of FTX and the algorithmic stablecoin terraUSD losing its peg to the US dollar.

Amid these developments, bitcoin prices have fallen significantly, from nearly $40,000 in early May to below $16,000 last month.

Now that 2022 is coming to an end, it will be interesting to see what next year has in store.

Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, EOS, and sol.

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