The volatility of the first cryptocurrency is often cited as one of the reasons why Wall Street investors shy away from investing in bitcoin. However, JPMorgan analysts believe that the figure is normalizing.
A group of investment bank researchers led by Nikolaos Panigirtzoglou noted that sharp fluctuations in the price of BTC are beginning to “subside”. The real volatility of the first cryptocurrency in six months is 72%, which is noticeably lower than previous highs exceeding 100%.
“Over the past weeks, we have seen a peak in bitcoin volatility and signs of a decline from late February levels. And this is a positive sign. Volatility normalization could spur interest in bitcoin from institutional investors. Moreover, in the first quarter of 2021, they significantly reduced investments in this asset, “the researchers write.
At the same time, the volatility of bitcoin itself is not as important as in comparison with the similar indicator of gold. And if the volatility of bitcoin gets closer to the volatility of gold, then “BTC may become a more important vehicle for accumulating wealth, as investors gravitate more towards ‘digital gold’ than to conventional gold.”
According to CoinShares, institutional investors have pushed new Bitcoin investments down to October 2020 levels.
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