Bitcoin Exhibits Unprecedented Calm Amidst Global Market Turmoil

Bitcoin, known for its erratic price swings, has seen a significant reduction in volatility. Its 30-day realized volatility, currently at 42%, has remained below 50% this month, outpacing the stability of South Korea's Kospi stock index, which has a market capitalization roughly twice that of Bitcoin. The Kospi index reached a volatility of 74% last week and still hovers around 51%. Pakistan's KSE 100 index also exhibits similar volatility, sitting at around 51%. Bitcoin's declining volatility can be attributed to the introduction of spot ETFs in the US in January 2024, which has led to increased institutional participation and more stable capital flows. This relative stability reinforces Bitcoin's appeal as a hedge against macroeconomic forces like wars, which have historically seen the cryptocurrency outperform traditional assets such as gold and the S&P 500. While most major regional markets have shown less volatility than Bitcoin, South Korea's higher volatility is largely due to its significant reliance on fossil fuel imports, making it more susceptible to energy market disruptions. The recent fluctuations in the Kospi index can be attributed to the conflict between Iran and the US-Israeli coalition, which led to a closure of the Strait of Hormuz and a subsequent spike in oil prices. In contrast, Bitcoin has remained relatively steady, trading between $65,000 and $75,000, supported by renewed investments into US-listed spot exchange-traded funds (ETFs).