It should be noted that Bitcoin’s correlation with Etherium’s value has now reached its eleven-month low, which means that the assets’ price movements are not particularly similar to each other. Apparently, this is possible due to the relative stability of BTC, while ETH experienced a significant collapse after an important update in September.

Bitcoin and Etherium rate correlation levels

As a reminder, in mid-September, the Etherium network switched to the Proof-of-Stake consensus algorithm, whereby miners with video cards were replaced by stackers. As a result, the blockchain’s power consumption dropped by 99.9 percent, and new ETH issuance dropped by an estimated 90 percent.

Despite such positive changes, the exchange rate of ether has seen a noticeable dip. Here’s a chart of ETH’s value over the past three months, where the collapse is visible.

Chart of ETH’s ETH exchange rate over the past three months

How reliable is Bitcoin?

The correlation between the S&P 500 stock index and Bitcoin has been rising sharply throughout 2022. The chart below shows that the index is near historic highs and almost double its value for 2020.

Correlation of BTC with the S&P 500


Generally speaking, Bitcoin's similarity to tech stocks in recent months makes the cryptocurrency a riskier asset as perceived by investors. This means that in the current critical environment, they can bypass BTC and instead opt for either fairly stable gold or stay in the dollar, which is showing strength today given the constant key rate hikes by Fed officials.

However, the day before Bitcoin started to show more stability against equities and some fiat currencies. A case in point here is the pound sterling, which has depreciated markedly in recent weeks. Here is a chart of the pound's value against the dollar for clarity.


Depreciation of the pound against the dollar in 2022

According to CryptoSlate sources, more interesting ratios can be found against national currencies. Specifically, Bitcoin and Etherium have fallen in value by 2.85 per cent and 3.85 per cent respectively since the seventh of October. Over the same period, the British pound, euro, Chinese yuan and Israeli shekel fell by an average of 1.37 per cent, while the US dollar, Australian dollar, Japanese yen and Canadian dollar rose by an average of 0.65 per cent.

In other words, volatility in crypto is now only slightly higher than for traditional currencies. That said, for a national currency, a loss of more than one percent of its value in a couple of weeks is quite a notable event, but for Bitcoin, such volatility seems not just acceptable, but even low.

Currency movements over the past few days

The chart for the period in 2022 shows the situation on a more detailed scale. In the third quarter, Etherium saw the most volatility, while the US dollar has consistently strengthened since the end of August. Bitcoin saw a more noticeable dip in price over the same period, but its volatility was less.

Currency movements this quarter

Looking at the scale for the full year, the US dollar was the winner, rising 16.97 per cent with steady price growth without much volatility. The Russian rouble gained 21.09 per cent for the year after falling 45 per cent in March, although this rate is generally not in line with the market.

Currency movements since the beginning of the year

Bitcoin and Etherium have fallen significantly since January, with cryptocurrency prices down 56.11 per cent and 65.99 per cent respectively. An even more accurate picture of cryptocurrency volatility declines can be seen in the chart. From mid-September onwards, two of the smoothest lines for coins are observed, indicating low trading activity.

Note that the annual price drawdown in crypto is much worse than in traditional currencies. In total, of the basket of currencies in question, the British pound suffered the biggest losses at the equivalent of 16.87 per cent and the Japanese yen with a 22.21 per cent dip. However, all currencies except the US dollar are following a six-month downward trend in value.


We believe that, given the current challenging economic situation, Bitcoin is showing good stability. If this trend continues, there will be an additional reason for capital holders to get involved with digital assets. Still, many countries are facing inflation, which makes the issue of finding a safe haven for funds critical and widespread. And that means that sooner or later, even those who previously avoided it will be able to make a choice in favor of BTC.


Read even more interesting things in our millionaires’ cryptochat. There we will discuss other important developments in the world of digital assets.