Demanding Justice for Bitcoin! Institutional research shows: volatility lower than 29% of index constituents this year

Asset management firm Van Eck's latest research report challenges the common stereotype of Bitcoin, indicating that Bitcoin's price volatility is lower than that of certain stocks, with over a quarter of the components of the S&P 500 experiencing higher volatility than Bitcoin.

Bitcoin: Rollercoaster Ride?

Asset management firm Van Eck has compared the volatility of Bitcoin with traditional assets such as stocks, revealing an interesting trend in their research.

According to their latest report, Gabor Gurbacs, Director of Digital Assets Strategy at the firm, pointed out that in the S&P 500 index components, 112 stocks (22%) have exhibited higher volatility than Bitcoin in the past 90 days (as of 11/13), and on an annual basis, 145 stocks have shown higher volatility than Bitcoin.

Furthermore, the firm has conducted long-term research on Bitcoin. While Bitcoin appears to be often correlated with U.S. stocks, Van Eck emphasized a significant increase in the correlation between Bitcoin and gold this year. The correlations from the beginning of the year to date with various assets are as follows:

• Bitcoin and Gold: 0.42
• Emerging Market Currencies: 0.29
• Oil: 0.29
• Nasdaq 100: 0.16
• S&P 500: 0.13
• U.S. Real Estate: 0.15
• U.S. Bonds: 0.13

Bitcoin and Gold Correlation

As observed from the above chart, the long-term correlation of Bitcoin with traditional asset classes is relatively low. However, with the impact of the COVID-19 pandemic this year, the correlation between Bitcoin and gold has increased. Van Eck believes this signifies an increasing hedging attribute of Bitcoin, which, if added to a portfolio, could help reduce volatility.

In fact, within Van Eck's nearly $50 billion assets under management, the majority is related to gold funds. The firm established its first gold stock fund (INIVX) in 1968 and launched a gold mining ETF (GDX) in 2006.

It is evident that Van Eck, known for its gold ETFs, has no need to promote Bitcoin. However, the firm is not averse to Bitcoin as a new asset class and has even submitted a Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC) despite being rejected.

Perhaps this research by Van Eck is also a means of dialogue with U.S. regulators, demonstrating that the volatility of Bitcoin is not significantly different from indices, ETFs, and other products, paving the way once again for future Bitcoin ETF products.