– Bitcoin volatility shows not currency or safe haven but speculation
– Volatility still very high in Bitcoin and crypto currencies (see charts)
– Bitcoin fell 25% over weekend; Recent high of $3,000 fell to below $1,900
– Bitcoin least volatile of cryptos, around 75% annualized volatility
– Gold much more stable at just 10% annualized volatility
– Bitcoin volatility against USD about 5-7 times vol of traditional forex trading
– Cryptos remain subject to huge speculation with little fundamental analysis
– Despite major differences, many crypto currencies correlated, mimic one another
– Extreme hype – Bitcoin expert bets will eat own body part on national television
– Millennials can punt on Bitcoin, should also own gold and silver for long term
– Cryptos mere ‘babies’ when compared to time tested gold and silver

BTC in US Dollars – 1 Year (Source: Coindesk)

Crypto volatility and hype shows immaturity remains

The joy about working in precious metals is that for part of the weekend you can switch off.

There is a precious time when markets are closed and you don’t have to worry about market movements and what might be happening. You check back in on Sunday afternoon/evening and can delight in the markets starting to wake up for the week ahead. This isn’t the case in cryptocurrencies.

This weekend crypto-currency market participants got a wake-up call as to what 24/7/365 market trading really means. They watched the price of Bitcoin plummet around 10% on Sunday morning (EST) alone. This contributed to Bitcoin’s overall fall of 25% since last Thursday and into the weekend. Other crypto currencies fell by more.

BTC Versus Gold Volatility (Source: Buybitcoinworldwide.com)

The volatility is so bad that if you are one of the few with a Bitcoin app that allows you to actually spend your Bitcoin then you might have found yourself paying for a brunch that was a hell of a lot more expensive than when you originally sat down to order it. You then might have noticed as you left the cafe that the currency was in full recovery mode and that brunch needn’t have been so expensive after all.

Just over one month ago Bitcoin was flirting with $3,000, appearing on the front pages of financial magazines and Google saw record searches for ‘Bitcoin.’ On Sunday’s crash the price reached $1,863 but as I write this early Thursday morning (BST) it’s at $2,351.

What is this volatility all about and how can cryptocurrency proponents claim that this new money will change the world when its price behavior can barely manage to guarantee we’ll be able to afford breakfast?