Quick Take
Bitcoin, often dubbed “digital gold,” shares some characteristics with the precious metal, though the two are perceived differently in investment circles. While Bitcoin (BTC) is considered a “risk-on” asset, favored during periods of market optimism, gold is viewed as a “risk-off” asset, preferred during uncertainty.
The Aug. 5 sell-off, driven by the unwinding of the yen carry trade, led to declines in both Bitcoin and gold. This indicates that during broad market sell-offs, most assets tend to move in tandem, challenging the notion of certain assets, like gold, being classified as “risk-off.”
Over the past five years, Bitcoin has delivered impressive returns of over 400%, compared to gold’s 61%. However, Bitcoin’s volatility makes it challenging to hold, with significant fluctuations both on an absolute and relative basis.
BTCUSD vs Gold – 5YRs: (Source: TradingView)
Absolute Volatility
Absolute volatility refers to the magnitude of price swings over

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