Bitcoin has long been painted as a rollercoaster investment—wildly unpredictable, dangerously speculative, and too volatile for serious portfolios. But is this perception grounded in reality, or is it a lingering stereotype from its early days? As Bitcoin matures and gains broader institutional acceptance, it's time to reevaluate the narrative around its volatility with fresh data and analytical rigor.
This article revisits Mieszko Mazur’s influential 2022 study on Bitcoin volatility and updates the analysis using data from late 2020 to early 2024. Our goal is not to defend Bitcoin at all costs, but to assess its risk profile objectively—using empirical evidence, comparative benchmarks, and multiple volatility metrics.
The Evolution of Bitcoin: From Obscurity to Mainstream Asset
Launched in 2008 via a now-iconic whitepaper, Bitcoin began as a fringe experiment in decentralized digital money. Fast forward to mid-2024, and it boasts a market capitalization nearing $1.3 trillion, earning its place as the flagship digital asset in global financial discourse.
Despite its growing legitimacy, skepticism remains—especially around volatility. High-profile critics like Vanguard CEO Tim Buckley have dismissed Bitcoin for long-term investing, citing excessive price swings. But does this view hold up under scrutiny?
To answer that, we need more than headlines—we need data.
👉 Discover how institutional investors are rethinking digital assets in volatile markets.
Revisiting Mazur’s Framework: Three Key Volatility Metrics
Mazur’s original research analyzed Bitcoin’s behavior during the March 2020 market crash, comparing it to traditional assets using three core measures:
- Relative ranking of daily realized volatility
- Daily realized volatility
- Range-based realized volatility
We applied the same framework, updating the dataset through early 2024 and incorporating new market shocks: the Russia-Ukraine war, the US banking crisis of 2023, and the FTX collapse.
Our data sources include EODHD, FRED, S&P Global, and Yahoo! Finance. For carbon credits—which were unavailable directly—we used the KRBN ETF as a proxy.
Updated Findings: How Bitcoin Performed Across Market Shocks
1. Relative Daily Realized Volatility: A Shift in Standing
In Exhibit 1, Bitcoin’s daily realized volatility is ranked against S&P 1500 constituents, where higher percentiles indicate greater volatility.
From November 2020 to February 2024, Bitcoin averaged around the 80th percentile, meaning it was more volatile than 80% of S&P 1500 stocks. While this suggests elevated volatility, it's far from the extreme outlier status often assumed.
During specific crises:
- In May 2020 and December 2022, Bitcoin was less volatile than the median S&P 1500 stock.
- However, during the Russia-Ukraine conflict and FTX collapse, Bitcoin showed higher peak volatility than most equities—though still less than commodities like oil and carbon credits.
This indicates that while Bitcoin can spike during uncertainty, it doesn’t consistently rank among the most volatile assets.
2. Absolute Daily Realized Volatility: A Clear Downward Trend
One of Mazur’s most compelling findings was Bitcoin’s declining volatility over time. Our updated data confirms this trend.
Using a rolling 21-day standard deviation (annualized), we observed:
- 2021 peak: 97.3% annualized (May)
- 2022 peak: 87.9% annualized (June)
- 2023 peak: 65.7% annualized (March)
The pattern is clear: each successive peak is lower. This gradual stabilization reflects increased market depth, improved liquidity, and growing participation from institutional players.
Bitcoin may still experience sharp moves, but they are becoming less frequent and less severe over time.
3. Range-Based Realized Volatility: Why Perception Lags Reality
Here’s where perception diverges sharply from data.
Range-based volatility—measured using a normalized 21-day Average True Range (ATR)—captures intraday price swings, including gaps between closing and opening prices. This metric was consistently 1.74% higher than close-to-close daily volatility in our sample.
Why does this matter?
Because media narratives often focus on dramatic intraday swings—the “Bitcoin dropped 10% in an hour” headlines—while ignoring longer-term trends. This emphasis fuels the belief that Bitcoin is uniquely unstable.
Yet even by this broader measure, Bitcoin’s range-based volatility ranked around the 79th percentile versus the S&P 1500—still high, but not exceptional.
👉 See how real-time data tools help traders navigate price fluctuations confidently.
Key Takeaways: Dispelling the Volatility Myth
Our analysis supports several conclusions:
- ✅ Bitcoin’s volatility has declined steadily over the past decade.
- ✅ It is not consistently more volatile than major asset classes like oil or carbon credits during crises.
- ✅ The gap between daily close-to-close and intraday range-based volatility helps explain public misperceptions.
- ❌ However, Bitcoin no longer outperforms equities in stability during market shocks—a shift since 2020.
In short: Bitcoin is less volatile than commonly believed, especially when viewed through a multi-year lens.
Frequently Asked Questions (FAQ)
Q: Is Bitcoin still too risky for long-term investors?
A: While Bitcoin carries higher short-term risk than blue-chip stocks or bonds, its improving stability and diversification benefits make it a viable allocation for risk-tolerant investors—typically within a diversified portfolio of 1–5%.
Q: Why do people think Bitcoin is so volatile?
A: Media coverage tends to highlight extreme intraday moves rather than long-term trends. Additionally, range-based volatility (which includes gaps and wicks) is significantly higher than close-to-close measures—amplifying perceived instability.
Q: How does Bitcoin compare to gold or tech stocks in terms of volatility?
A: Over the past three years, Bitcoin has shown higher volatility than gold but comparable or lower levels than many high-growth tech stocks in the S&P 500 during periods of stress.
Q: Can regulation reduce Bitcoin’s volatility?
A: Yes. Increased regulatory clarity—such as ETF approvals and clearer tax guidance—tends to boost institutional participation, which enhances liquidity and dampens extreme price swings.
Q: Does lower volatility mean Bitcoin is maturing as an asset class?
A: Absolutely. Declining volatility, rising market cap, and broader adoption are all hallmarks of asset class maturation. Bitcoin is transitioning from speculative instrument to strategic holding.
Final Thoughts: Perception vs. Reality
The idea that Bitcoin is uncontrollably volatile persists—but data tells a different story. While it remains more volatile than traditional safe-haven assets, its risk profile has evolved significantly.
As liquidity deepens and macro adoption accelerates, we expect Bitcoin’s volatility to continue converging with that of other alternative investments.
For investors, the lesson is clear: approach Bitcoin not with fear or hype, but with analysis—and an open mind.
👉 Access advanced analytics tools to monitor crypto market dynamics in real time.