S&P 500 Volatility Enters Bitcoin Territory CoinDesk

CORRECTION (May 28, 15:51 UTC): Due to a data calculation error, an earlier version of this story overstated the S&P 500’s volatility in the days since March 12. It has risen, but not above 80 percent.

In a role reversal befitting these topsy-turvy times, Wall Street has recently seen more turbulence than the average for the top cryptocurrency.

The S&P 500’s 30-day volatility of daily returns, or historical volatility, jumped to nearly 80 percent Wednesday, according to data from the Federal Reserve Bank of St. Louis.

Meanwhile, bitcoin’s (BTC) volatility gauge stood at 138 percent on Wednesday compared to the average volatility of 65 percent seen in the March 2019-February 2019 period, as per CoinDesk’s Bitcoin Price Index.

The 30-day volatility of daily returns calculates the standard deviation of the daily gain or loss from each of the past 30 trading days and is usually expressed in annual terms irrespective of the time period.

See also: Miners Are Selling More Bitcoin Than They Are Mining

Put simply, it gauges fluctuations from the mean but does not measure the direction. So, when we say that the S&P 500’s volatility reading has surpassed bitcoin’s average, it means the cryptocurrency on average witnesses smaller deviations from the mean compared to what the equity index has seen over the last 30 days.

Bitcoin volatility and average volatility and S&P 500 index volatility, charted vs. time
Bitcoin volatility and average volatility and S&P 500 index volatility, charted vs. time

The S&P 500’s volatility began rising in the first week of March as the coronavirus outbreak outside China gathered pace, stoking fears of a global recession.

The situation worsened in the second and third week, as the persistent sell-off in stocks triggered margin calls, forcing investors to treat traditional safe-haven assets like gold and U.S. Treasurys as sources of liquidity.

That further boosted uncertainty and added to the price volatility – so much so that 4 to 5 percent daily moves have become a new normal.

In fact, the volatility in the equity market…

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