Think Bitcoin Is Volatile? These Crypto-Related Stocks May Witness More Significant Price Swings Than BTC In The Days Ahead

Over the years, cryptocurrencies, including Bitcoin BTC/USD, have earned the reputation of being one of the most volatile asset classes in the market. 

Interestingly, publicly traded companies that are directly or indirectly tied to cryptocurrencies were experiencing higher volatility than Bitcoin and were expected to record more substantial price swings than the leading currency in the coming days. 

What Happened: MicroStrategy Inc. MSTR, known for its vast Bitcoin stockpile, recorded a 30-day implied volatility (IV) of 81% at Tuesday's market close, according to Fintel.

Similarly, America's biggest cryptocurrency exchange Coinbase Global Inc. COIN registered an implied volatility of 68%, while the stock of the world's biggest Bitcoin mining company, Marathon Digital Holdings Inc. MARA, showed a reading of 85%. 

In comparison, Bitcoin’s 30-day implied volatility was 55% as of this writing, according to the charting platform, TradingView. King Crypto's volatility forecast has dropped significantly since yearly highs of 82% in March. 

For context, implied volatility is a forward-looking measure of volatility used by options traders. It is used to determine the expected price fluctuations of a stock over a specific period.

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Why It Matters: The marked difference in projected volatility came amid Bitcoin’s months-long sideways movement following its all-time high in early March. With the exception of a few market downtrends, King Crypto has generally drifted between $62,000 and $72,000. 

The projection of higher volatility for the aforementioned stocks mirrors a similar forecast for AI chip-making giant NVIDIA Corp. NVDA. At Tuesday's market close, the tech powerhouse recorded an implied volatility of 66%, higher than Bitcoin.

Price Action: At the time of writing, Bitcoin was exchanging hands at $61,076.15, up 3.14% in the last 24 hours, according to data from Benzinga Pro. Shares of MicroStrategy closed 2.98% higher at $135.38 after Tuesday’s regular trading session. Coinbase ended 3.23% up at $197.94, while Marathon Digital popped 2.51% to $15.49.

Photo Courtesy: Gerd Altmann from Pixabay

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