Nvidia and the most volatile Bitcoin mining company stocks

Recently, the volatility of the stock prices of some famous companies like Nvidia and stocks related to Bitcoin mining has increased.

The volatility of Bitcoin and stocks related to mining such as Nvidia

Volatility refers to the average price variation over a period of time.

It can be measured, for example, with the so-called Bitcoin Volatility Index, which has existed since 2011.

Taking as a reference the 30-day volatility of the BTC price in dollars (USD), it is clearly noticeable that since 2021 the volatility has decreased significantly. 

To tell the truth, until 2012 it had remained very high, but generally, the data from the first Bitcoin cycle is not used as a reference for comparisons.

For example, after the first halving in November 2012, the 30-day volatility dropped below 0.9%, only to then spike in 2013 to over 14%. That remains the highest peak of volatility from the first halving to today. 

During the second great bull run, volatility rose to a peak of over 8% in January 2018, which is when the bear-market began, and during the last great bubble, it reached more than 5%. 

As you can see, it is a series of descending highs that clearly gives the idea of a contraction in volatility over time. 

At the end of 2022, the 30-day volatility dropped to around 1%, and since then it has had only a single peak above 3% in March 2023, when several US banks failed. 

The following peak was in March of this year, but lower than 2.9%. Furthermore, since then it has not risen above 2.5%. 

In other words, the trend of reducing BTC price volatility has been in place for years. 

The volatility of Nvidia

Taking as a reference this month of July 2024, the price of Bitcoin recorded a minimum of around $53,500, and a maximum of $70,000. 

The intermediate price was therefore around $61,700, with maximum fluctuations slightly above 13%. 

The Nvidia stock, on the other hand, in July so far has recorded a minimum price of 102.5%, and a maximum price of 136.1$. 

The intermediate price was therefore slightly below $120, with maximum fluctuations exceeding 14%. 

In other words, the price of Nvidia shares in July turned out to be more volatile than that of Bitcoin, although not by much. 

But it is not a particularly recent phenomenon. In May, for example, the maximum fluctuations compared to the intermediate price of Bitcoin were 12%, while those of Nvidia shares were even 17%.

In February, however, Nvidia had a maximum fluctuation of 14%, while Bitcoin exceeded 21%. 

It is therefore a difference that varies from month to month, even though lately there are more months in which Nvidia is more volatile than Bitcoin compared to the opposite. 

The titles of Bitcoin mining: more volatile than Nvidia stocks

Another asset that has high volatility is the stocks of companies involved in mining crypto. 

Taking as a reference MARA of Marathon Digital Holdings, in July the maximum fluctuations compared to the intermediate price were over 18%, and in February they were even over 35%. 

In December 2023, when the last bull run actually started, they went from just over $12 to over $23 in just one month, with a maximum fluctuation of 44%. 

These are therefore even more volatile stocks than Nvidia, as well as Bitcoin. The strangest thing is that they should actually be linked to the price trend of BTC, only that they practically amplify its movements, in percentage, both upwards and downwards. 

Examining the performance of the shares of another famous miner listed on the stock exchange, Riot Platforms (RIOT), similar results are obtained, with 19% in July, 28% in February, and 19% in December 2023.

In the end, the inevitable reduction in the volatility of Bitcoin’s price has meant that there are now several other assets on the markets, even serious ones, that are recording greater volatility. 

The performance of Ethereum

Something very similar to what has been happening over the years to the volatility of the price of Bitcoin is also happening to Ethereum. 

The Ethereum Volatility Index, comparable to the Bitcoin Volatility Index mentioned above, shows a volatility of less than 2.75% in the last 30 days, regarding the price of ETH in USD, even though just last month it was above 3%. 

Therefore, although the price volatility of ETH is also decreasing over the years, it is still slightly higher than that of BTC, and more or less comparable to that of the Nvidia stock. 

To tell the truth, in July the volatility of Nvidia’s stock price was higher even compared to that of Ethereum, and it is possible that this trend will continue for a few more months.