Known for its volatility, BitcoinBTC$76,254.96 has historically experienced significant price fluctuations, often doubling or halving within months. However, recent trends suggest a change in this pattern.
As per TradingView data, Bitcoin’s 30-day realized volatility is currently at 42%, maintaining below the 50% mark this month. In contrast, South Korea’s Kospi stock index, with a market capitalization roughly double that of the largest cryptocurrency, reached 74% last week and remains around 51%. Similarly, Pakistan’s KSE 100 index shows comparable volatility levels.
The decline in Bitcoin’s price swings over recent years can be largely attributed to the introduction of spot ETFs in the U.S. in January 2024. These vehicles have attracted institutional investors, fostering more stable capital flows and reducing extreme price movements.
Bitcoin’s stability is increasingly viewed as advantageous during geopolitical turmoil, maintaining its value when traditional assets are affected by macroeconomic forces like wars. Early this month, River, a bitcoin-exclusive financial institution, highlighted that BTC has outperformed gold and the S&P 500 in such scenarios.
Despite Bitcoin’s relative steadiness, most major regional and global markets have demonstrated lower volatility during the same period. This raises questions about South Korea’s unique market behavior, given its position as the world’s 14th-largest economy.
Korean stock market volatility is largely driven by fluctuations in fossil fuel costs, a factor not applicable to Bitcoin. The Kospi dropped from 6,340 points in late February to 5,000 by March’s end, only to rebound above 6,380 points subsequently.
The initial downturn was triggered by the onset of conflict between Iran and a U.S.-Israeli coalition on Feb. 28, leading to the Strait of Hormuz’s closure—a crucial oil supply route. South Korea, which imports nearly all its fossil fuels from the Middle East, was significantly impacted by the resultant spike in oil prices.
As tensions eased and negotiations for a temporary ceasefire commenced, set to end on Wednesday, the Kospi regained stability. Pakistan’s stock market experienced similar volatility due to its heavy reliance on energy markets.
During this period, Bitcoin remained relatively stable, trading primarily between $65,000 and $75,000, buoyed by new investments in U.S.-listed spot ETFs.