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Bitcoin’s Volatility Limits Gains in 2021

Bitcoin Regression Shows Muted Returns

Today’s Chart of the Day shows Bitcoin against the dollar on a logarithmic scale over the past five years, measuring the acceleration of the cryptocurrency’s move while accounting for its volatility. After peaking in late 2017, Bitcoin has largely traded sideways. Volatility tied to the presidential election gave it a boost, which then sped up as traders embraced risk after the first Covid vaccine arrived in early November 2020. For a while, Bitcoin showed a positive correlation the S&P 500 Index, emerging-market securities and even commodities as a measure of inflation. But then, after putting up a 516% return in about six months, its momentum plateaued in 2021.