Until the start of November, crypto volatility was trending down. Then, several major events happened and the whole cryptosphere went off the charts. But why? According to the Crypto Volatility report released today by SFOX, cryptoassets showed more volatility than the S&P 500 and gold during November, and there are four key factors that contributed to the market’s roller coaster ride.
Taking into account price, volume, and volatility data from seven major exchanges and liquidity providers, SFOX analyzed spikes in volatility and matched them to major industry happenings. The key findings are below.
1. Uncertainty Before the Bitcoin Cash Fork
The uncertainty leading up to the Bitcoin Cash hard fork caused a rampant flooding of FUD throughout the market. Bitcoin Cash pipped all other cryptos to the post when it came to volatility in November. In fact, its price fluctuation relative to Bitcoin’s actually doubled in the moments before the fork.
The four major assets listed by SFOX — BTC, ETH, BCH, and LTC — all demonstrated the same rise in volatility starting on November 14, the day before the fork, but BCH volatility came into its own on November 15.
2. The Hash War After the Fork
The Bitcoin Cash fork was always going to be a natural recipe for increased crypto volatility, but it continued to wreak havoc after the event. SFOX confirms that the ongoing hash war remained a key driver of volatility even after the fork, as BCH and BSV competed for common hash power, and the outcome for both chains was uncertain.
3. The SEC Clamping Down on ICOs
Another major event in November that set crypto volatility further alight was an SEC announcement on November 16.