Drawing an interesting comparison, CoinShares’ chief strategy officer explains the analogy of volatility by comparing Bitcoin (BTC) with Tesla (TSLA) shares. Both these asset classes have been the top performers this year and favorite among the investors’ community.
“Everything else has become more volatile. As we know, volatility is a relative measure. In the current environment, bitcoin is actually less volatile than it has been in the past.”
Bitcoin’s year-to-date returns currently stand at above 200%. Besides, the world’s largest cryptocurrency has also surged more than 400% from its March 2020 lows. On the other hand, Tesla had a spectacular run on Wall Street becoming the most-valued automobile company with a market cap of over $600 billion.
The TSLA stock price has surged a massive 650% year-to-date as of Monday closing. Talking about the massive run-up in the TSLA stock and the equities market Demirors adds that Bitcoin’s price rally actually “doesn’t feel so wild”. He further noted:
Earlier on Sunday, Tesla CEO Elon Musk called Bitcoin “as bs as fiat”, however, also showed curiosity of making ‘large transactions’ in Bitcoin. Probably, Musk might be thinking of converting Tesla’s balance sheet to BTC.
Bitcoin remains the top choice for institutional investors who have been pouring millions of dollars into the cryptocurrency over the last few months. On Monday, December 21, MicroStrategy announced an additional investment of $650 million in Bitcoin while buying during the market correction. With the latest purchase, MicroStrategy’s total BTC holdings go above 70,000 BTCs worth $1.125 billion.
On Monday, JPMorgan analysts noted that institutional inflows in Bitcoin funds are key its price rally further. The analysts specifically noted the growth of Grayscale Bitcoin Trust (GBTC) with over $13.3 billion of assets under management. However, later on Monday, Grayscale announced that it is temporarily pausing all investments coming into GBTC.