RATE Group | Cryptocurrencies Show Signs of Maturing But Remain Too Risky
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Cryptocurrencies Show Signs of Maturing But Remain Too Risky

Cryptocurrencies Show Signs of Maturing But Remain Too Risky

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Bitcoin (BTC) presented historically low volatility this year, argues the Dec. 2019 SFOX report released on Jan. 8. Coupled with a lower correlation with altcoins, there are emerging signs that the market could start to behave in a more predictable way. However, the cryptocurrency asset class remains disproportionately risky compared to the stock market.

In its final monthly report for 2019, the analytics firm SFOX analyzed the yearly performance of Bitcoin and other cryptocurrencies.

Compared to traditional assets such as gold and stocks, Bitcoin held a remarkably low correlation index for the past six months. Its average 30-day correlation amounted to -0.037 for the S&P 500 and 0.149 for gold. In addition, the correlation between Bitcoin and altcoins dropped from highs of 0.7 to as low as 0.4.

Furthermore, Bitcoin’s volatility fell during the later stages of the year. While still remaining well above the corresponding values for traditional assets, cryptocurrency markets…

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