Bitcoin is currently exhibiting less volatility than South Korea’s stock market
Bitcoin’s relative calm amid global tensions has strengthened its case as a protective investment.
Key takeaways:
— Bitcoin’s 30-day realized volatility has dropped beneath that of South Korea’s Kospi and Pakistan’s KSE 100 indexes, contradicting its image as a highly unstable asset.
— Recent conflict-induced energy disruptions and rising oil costs have increased volatility in Korean and Pakistani equities, while Bitcoin has traded within a narrower band of roughly $65,000 to $75,000.
— Bitcoin’s steadiness during geopolitical instability has bolstered its attractiveness as a hedge.
In this article
Bitcoin
According to TradingView data, Bitcoin’s 30-day realized volatility is currently at 42%, staying under 50% for the month. In comparison, South Korea’s benchmark Kospi index, with a market capitalization roughly double that of the largest cryptocurrency, reached 74% last week and remains near 51%. Pakistan’s equity market is also more volatile, with its KSE 100 index hovering around 51%.
Bitcoin’s volatility — a metric reflecting the extent of price fluctuations — has consistently decreased over recent years, especially following the launch of spot ETFs in the U.S. in January 2024. These financial products have attracted greater institutional involvement, introducing more risk-controlled capital that has helped moderate price swings.
This relative steadiness highlights its value as a geopolitical hedge, maintaining worth when macroeconomic events like conflicts disrupt traditional assets. BTC has historically outperformed gold, the S&P 500, and other conventional assets during wars, as noted by River, a Bitcoin-focused financial firm, earlier this month.
However, most major regional markets and their global equivalents showed less volatility than BTC during this period. This prompts the question: What sets South Korea, the world’s 14th-largest economy, apart?
Korean market dynamics
The increased volatility in Korean stocks largely mirrors fluctuations in fossil fuel costs, a factor that does not directly impact Bitcoin.
The Kospi declined from 6,340 points in late February to 5,000 by the end of March, before recovering to record highs exceeding 6,380 points.
The initial sell-off happened as tensions rose between Iran and the U.S.-Israeli coalition, beginning Feb. 28, ultimately leading to the closure of the Strait of Hormuz, a critical oil supply route. This disruption and the subsequent oil price surge adversely affected South Korea, as the nation imports nearly all its fossil fuels, including oil and natural gas from the Middle East.
Subsequently, the index stabilized as the conflict de-escalated and both sides negotiated a temporary ceasefire, scheduled to end on Wednesday. Pakistan’s stock market experienced similar fluctuations, with its economy equally, if not more, vulnerable to energy market disruptions.
During this period, Bitcoin remained relatively stable, trading primarily between $65,000 and $75,000, supported by renewed inflows into U.S.-listed spot exchange-traded funds (ETFs).