Decoding volatility: Are big tech stocks as stable as we think?

Bitcoin has long been the subject of scrutiny for its high volatility, which has been a significant deterrent for many institutional investors.

These institutions, which include hedge funds, investment funds, and asset managers, often cite Bitcoin’s volatility as the primary reason for its exclusion from their portfolios. Regulatory bodies globally have also pointed to Bitcoin’s volatility as a key factor behind their stringent stance on regulating the crypto industry.

Volatility, in financial terms, refers to the degree of variation observed in the price of a financial instrument over time. High volatility is often associated with higher risk as it indicates larger price swings and, therefore, greater uncertainty. Bitcoin, with its relatively short history and rapid price movements, is often viewed as a highly volatile asset.

While the traditional financial market and regulators are often heavily focused on Bitcoin’s volatility, they seldom pay equal attention to the volatility seen in tech stocks, particularly mega-caps like Meta, Google, and NVIDIA. Despite being part of the traditional market, these stocks have shown significant price swings, often comparable to those seen in Bitcoin. Yet, the perception of volatility and risk associated with these stocks is often less severe than that of Bitcoin.

This discrepancy in perceived volatility between Bitcoin and tech stocks is intriguing. It raises questions about our understanding of volatility and risk and how these factors influence investment decisions.

In this report, CryptoSlate will dive deep into stock volatility to analyze just how different the ups and downs of the traditional market are from Bitcoin. The aim is to provide a more nuanced understanding of volatility in different asset classes and to challenge the prevailing narratives around risk and investment in the financial world.