| Kraken Intelligence

Bitcoin Volatility Report for December 2019

Kraken Intelligence, our team of in-house research experts, has released the Bitcoin Volatility Report for December, 2019.

Key Takeaways

  • While bitcoin trading volumes and price fell -18.8% and -5.2% MoM, respectively, bitcoin’s annualized volatility was virtually flat MoM at 50.6%, the lowest level since last March.
  • In 2019, bitcoin posted a strong, positive correlation with gold (0.70), US investment grade corp. Bonds (0.78), and the US 10 Year T-bond (0.82), which suggests that bitcoin continues to mature as an alternative to traditional “risk-on” financial assets.
  • Crypto ponzi schemes were front and center in December — market participants were spooked by rumors that two BitClub Network mining conspirators remained at large and by 790,000 ETH having been moved from a PlusToken wallet to an unknown wallet.
  • Monthly returns and annualized volatility for 2019 expressed a relatively strong positive correlation with 2011 and 2016, which may be indicative of 2019 having been the early innings of a bull market.
  • Historical trends in bitcoin wallets with balances ranging between 10 BTC – 100 BTC and 1,000 BTC – 10,000 BTC suggest that market participants are back in an accumulation phase while whales are in a wait-and-see phase.

Where to Next?

We may be due for another few months of dampened volatility, if the historical correlation between volatility and the behavior of market participants and whales continues to hold.