Bitcoin
Why Fidelity says Bitcoin will rise again soon – DL News
- Bitcoin volatility is at historic lows.
- The top crypto could soon make a big upward move, Fidelity predicts.
- Bitcoin’s volatility has been decreasing over the years as the asset matures.
Bitcoin is traditionally seen as a risky asset, but its volatility is not constant – it ebbs and flows as the market enters manic phases and cools down again.
What’s more, the main cryptocurrency’s volatility has reached historic lows over the past 12 months, even though its price has reached an all-time high.
It’s a sign that Bitcoin could soon experience another massive price surge, Fidelity Investments research analyst Zack Wainwright wrote in a May 1 article. report.
Studying Bitcoin Volatility
The prediction comes as Bitcoin recovers from the wobble that saw it fall below $57,000 mark last week. It is currently trading above $63,600.
With volatility reaching historic lows, traders should prepare for Bitcoin to become more valuable – especially as there are little to no signs of trading mania.
“Investors have historically experienced large price increases over short periods of time as historic price highs have been revisited and subsequently broken under these circumstances,” Wainwright said.
Price appreciation tends to culminate with Bitcoin volatility rising to high levels, Fidelity said, indicating that speculation has become rampant and the market is overheated.
The exception, Fidelity noted, was the 2021 bull market.
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“Global events like the Covid-19 pandemic can massively change the trajectory of any market, including Bitcoin,” said Wainwright.
The report also said that Bitcoin’s volatility was falling over time.
In fact, Bitcoin has been less volatile than some big tech stocks — such as chipmaker Nvidia, electric car maker Tesla and Facebook owner Meta Platforms — over the past year.
Bitcoin’s decreasing volatility shows the asset is maturing in the eyes of investors, Fidelity said. And that may be why he managed to climb to a new all-time high in March maintaining low volatility.
Bitcoin was almost half as volatile in 2024, costing $60,000, compared to 2021 at the same price, Wainwright said.
Another asset that behaved similarly? Gold.
Gold’s volatility was nearly twice as high in 1980 as Bitcoin’s in April 2024, Fidelity said.
“Once gold became a recognized asset class and the market settled into a long-term price range, volatility also decreased,” Wainwright said.
Crypto Market Movers
- Bitcoin fell 1% in the last 24 hours, trading at $63,600.
- Ethereum fell 3.6% to trade at just over $3,000.
What are we reading
Tom Carreras is markets correspondent for DL News. Have a tip about Bitcoin? Get in touch at tcarreras@dlnews.com.