Editors Note: This article comes fromOrange Book (ID: chengpishu)Editors Note: This article comes from
Orange Book (ID: chengpishu)
Orange Book (ID: chengpishu)
, by Noelle Acheson, published with permission.
Everyones understanding of volatility is different.
This is like different people seeing the same news headlines, they will have their own understanding, which has a lot to do with his personal experience.
Volatility refers to drastic and unpredictable changes, usually with negative connotations. In financial markets, most people will instinctively avoid assets that fluctuate violently.
Bitcoin is a highly volatile asset. The following figure shows the change of Bitcoin volatility over time in a one-year time period:
In the case of standard deviation, we will find that the volatility of Bitcoin is decreasing, which seems to indicate that the Bitcoin market is maturing.
But remove the extreme data and put aside the influence of outlier data (a method commonly used in statistics that is more in line with the real situation), the volatility of Bitcoin has not changed much in a year, and it is still the high volatility sex assets.
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Why is Bitcoin Volatility High?
Bitcoin is currently a rare Real Asset, whose value is not related to other assets and only depends on its own attributes.
From the point of view that many people think that Bitcoin is a pyramid scheme, the value of Bitcoin depends entirely on consensus.
At present, the value of Bitcoin is equal to what the market thinks it is worth. In the absence of traditional fundamentals, most investors are actually guessing what other investors will think, so mainstream capital, main funds, and Zhuang. . . . Waiting for concepts to fly all over the sky.
The same goes for gold, which has no cash flows and whose market value is largely driven by consensus.
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Volatility comparison between gold and bitcoin
But why is gold less volatile? Because of the certainty of gold.
In the financial market, the fundamentals do not determine the price, but the markets description of the fundamentals determines the price.
At present, Bitcoin is uncertain. People who invest in Bitcoin are not sure about its fundamentals. If you ask ten people, you may get 20 different answers. World currency, digital gold, faith, blockchain MLM etc.
While gold has existed for thousands of years, the market sentiment towards it is relatively more stable, because the story of gold has a good global consensus.
For now, Bitcoins story is not stable, and its volatile story means that its volatility is unlikely to abate anytime soon.So until Bitcoin has a story that everyone believes in, market sentiment will be very vulnerable to various events and the price will follow.But no matter which direction its story goes, the bitcoin market will continue to zoom in that direction.
This reminds me of our article from last week,
BTC and ETH:
