1.8 Volatility
Last updated
Last updated
Volatility is the degree of variation in an assets price movements, most commonly measured by the standard deviation. Volatility relates to the uncertainty on the extent of price changes. High Volatility means prices might change dramatically within a short time period, whereas low volatility means that prices do not fluctuate severely but change at a steady pace.
The nascent cryptocurrency markets are still highly volatile. Bitcoins Volatility Index currently stands at a 30-day average of 5.01% and most Altcoins experience even more excessive price swings. In sharp contrast, the traditional markets just had their least volatile year in decades of trading. Bear and bull market cycles that last months or years in these markets are concluded in matters of weeks, days or even just hours in the cryptocurrency markets, creating huge trading opportunities every single day. But as the graphic below indicates, this drastic volatility is expected to fade as these markets mature over time
