Zhao argued that crypto’s volatility was not unlike the stock market, adding: that “volatility is everywhere” and that “it is not unique to crypto.”
However, those involved in cryptocurrency trading probably know that cryptocurrency prices fluctuate a lot more than listed trillion-dollar companies. This begs one to question whether or not Zhao is detecting a trend that some may have missed?
The first obvious reading from the chart above is that both Bitcoin and Tesla share different volatility levels when compared to trillion-dollar stocks like Apple and Amazon.
Moreover, stocks seem to have experienced a 60-day volatility peak in November 2020, while Bitcoin was relatively calm.
Tesla is an exception rather than the norm
Another thing to consider is that Tesla’s market capitalization is $633 billion, and it has yet to post a quarterly net income above $500 million. Meanwhile, every single top-20 global company is incredibly profitable. These include Microsoft (MSFT), Google (GOOG), Facebook (FB), Saudi Aramco (ARAMCO.AB), Alibaba (BABA), and TSM Semiconductor (TSM).
The list above shows the top-12 and bottom-12 most volatile stocks to show how Tesla’s (TSLA) price swings are far off the average of other $200 billion market cap companies. The volatility seen in cryptocurrencies has been the norm, given that there is a lack of earnings, a very early adoption-stage cycle, and a lack of an established valuation model.
One doesn’t need to be an expert in statistics to ascertain that the S&P 500 index performance has been pretty much stable over the past year, apart from a couple of weeks back in September and October 2020.