The volatility of Bitcoin reached its highest level in six years in March

Bitcoin Volatility Surges in March Amid Massive Sell-Offs

In March, Bitcoin's price volatility rose significantly as the cryptocurrency suffered heavy losses due to widespread asset sell-offs—ironically, followed by a sharp rebound in its price.

According to data compiled by asset management firm Blockforce Capital, the 30-day volatility of the digital currency reached 167.24% on March 31, the highest level since January 2014.

Additionally, Blockforce Capital’s data showed that the 60-day volatility on March 31 reached 122.95%, also the highest since February 2014.

Data from CoinDesk indicated that as Bitcoin prices plummeted, its volatility index soared to multi-year highs, with the cryptocurrency losing nearly 60% of its value in less than a week.

"This highly correlated movement occurred as investors sold off stocks amid fears of a recession triggered by the COVID-19 pandemic, leading to a massive liquidity crunch," one analyst noted.

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Is Bitcoin Really a Safe Haven?

As Bitcoin depreciated alongside other assets, some market observers began to question whether the digital currency truly functions as a safe haven.

In times of geopolitical turmoil, investors often flock to cryptocurrencies, driving up their prices.

However, in March, Bitcoin moved in sync with both stocks and gold.

Several analysts assessed these developments, commenting on the widespread losses across assets over the past month.

Jeff Dorman, Chief Investment Officer at asset management firm Arca, stated:

“We don’t believe the narrative that ‘BTC is a safe haven’ has changed at all.”

“Bitcoin still serves as a hedge against systemic financial risks—reckless government spending, banking crises, and fiat currency devaluation—even if it’s not perfectly inversely correlated with stocks.”

He further explained:

“Risk can be measured in minutes, days, weeks, or years, but in Bitcoin’s case, its safe-haven status might need to be defined over decades, in relation to the declining purchasing power of fiat currencies over time.”

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Dorman added:

“Over longer timeframes, digital assets are completely uncorrelated with all other asset classes.”

Nicholas Pelecanos expressed a similar view, emphasizing that:

“During a liquidity event, every asset’s correlation goes to 1.”

However, he noted this phenomenon gradually fades, and at that point:

“Bitcoin begins trading once again as a non-correlated asset.”

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Bitcoin’s ‘Unique Resilience’

Catherine Coley, CEO of Binance.US, said:

“Like other asset classes, Bitcoin has faced a significant shock due to COVID-19’s impact on the world and its economy.”

But that’s where the similarities end. As remote work continues globally, we’ve witnessed this asset class’s unique resilience, a surge in new users, strong price action, and even new industry developments.

Coley noted:

“As previously hypothetical use cases become reality, the importance of a digitized market resistant to government-driven inflation is gaining more attention.”

Michael Poutre, managing partner at blockchain-focused hedge fund Terraform Capital, also spoke about Bitcoin's strength.

“Recently, Bitcoin’s price has been impacted due to its relative youth and lack of broad ownership like other asset classes, but that is changing,” said Poutre.

He described the cryptocurrency as a “great investment” at its current price level, and predicted:

“When we look back 12 months from now, Bitcoin will prove to be one of the best, if not the best, investments people could have made.”

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Additional data from CoinDesk showed that the cryptocurrency hit a monthly high of $9,204.67 on March 7, before falling to $3,867.09 on March 12.

According to Google Finance, several other assets also declined—between March 2 and March 23, the S&P 500 Index dropped by over 25%.

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More Context

Gold, often compared to Bitcoin, also depreciated—but to a lesser extent.

According to Markets Insider, gold prices fell 13% in March, dropping from a monthly high of $1,697.40 on March 8 to $1,467.40 on March 19.

Nicholas Pelecanos, Head of Trading at NEM Ventures, stated:

“From early February to mid-March, the global equity, commodity, currency, and cryptocurrency markets experienced one of the most extreme sell-offs in history.”