Bitcoin has been called many things. Buzzing, seductive, disconcerting, even fake. But never boring. Lately, however, it has been eerily dim. The king of swingers has been afloat for days on around $20,000 and hasn’t ventured much beyond that since June.
That spells trouble for traders and exchanges profiting from bitcoin’s wild price shocks, and it’s opening the door for arch-rival ether, which is preparing to up its crypto game by moving to a meaner blockchain and agile.
“Bitcoin isn’t dead; it’s just boring right now, so traders are already looking for alternatives,” said Martin Leinweber, digital asset product strategist at MarketVector.
Bitcoin’s 30-day average volatility, a measure of how its price fluctuates over a given period, has plummeted to 2.7% from more than 4% in early July, according to data firm Coinglass.
That number has remained below 5% in 2022, even in the most turbulent “crypto winter” months of depressed prices, a departure from the last five years when spikes of up to 7% followed even periods of lower volatility.
Similarly, an index from CryptoCompare, which uses bitcoin futures contracts to work out how far prices are expected to change, stands at just over 77, down from above 90 at the start of the year.
Bitcoin has seen periods of reduced volatility in the past, often during periods of depressed or falling prices, with its price swings often coming back as trading activity picks up.
This slump may be different, though.
“This has been a relatively long period of decreased volatility; it’s now beyond anything we’ve seen in 2019 where these levels lasted around a quarter to a quarter-and-a-half,” said Stéphane Ouellette, CEO at crypto derivatives provider FRNT Financial.