Bitcoin, the most well-known name in the cryptocurrency markets, stood out in the past as an asset that could double or lose half its value in a short time. However, it is noticeable that this fluctuation has decreased significantly recently.
Volatility balance has changed
According to TradingView data, Bitcoin’s 30-day realized volatility currently stands at 42 percent and has remained below 50 percent throughout this month. On the other hand, while South Korea’s leading stock market index Kospi attracted attention with a high volatility of 74 percent last week, it fluctuates around 51 percent even these days. Similarly, Pakistan’s KSE 100 index has a volatility of 51 percent.
The decrease in volatility in Bitcoin gained momentum, especially in the period following the launch of spot ETFs in the USA in January 2024. While spot ETFs have enabled institutional investors to gain controlled entry into the market, more stable capital flows have significantly tamed price fluctuations.
Geopolitical developments and the role of Bitcoin
The decline in volatility supports Bitcoin’s separation from traditional assets and being seen as an alternative to geopolitical risks. A financial institution called River, which focuses solely on Bitcoin, noted earlier this month that BTC has outperformed traditional assets such as gold and the S&P 500 in times of war.
However, most other leading stock market indices still have lower volatility than Bitcoin. In this context, South Korea differs from other countries with its surprisingly high volatility.
River emphasized that Bitcoin maintains its value in times of conflict and offers a stronger geopolitical hedge than traditional assets.
Why is the Korean stock market so volatile?
One of the main reasons for this high volatility in South Korea is its sensitivity to fluctuations in energy prices. The country meets almost all of its fossil fuel needs, such as oil and natural gas, through imports. While the war that started between Iran and the US-Israel alliance at the end of February increased tensions, the closure of the Strait of Hormuz caused serious disruptions in energy supply chains. The jump in oil prices put pressure on Kospi.
After falling from 6,340 points in late February to 5,000 at the end of March, the Kospi index reached historical highs, rising above 6,380 as the conflict subsided. A similar situation occurred in the Pakistani stock market during this period; The fluctuation was even more pronounced because the country’s sensitivity to the energy market was high.
Throughout this period, Bitcoin has traded in a relatively narrow price range, hovering around the $65,000 to $75,000 band, supported by fresh inflows into U.S.-listed spot ETFs.
Market experts state that sudden changes in energy prices trigger volatility in the stock markets of countries such as South Korea and Pakistan, while Bitcoin has maintained a relatively stable course thanks to the increasing interest of institutional investors.
