Oil, one of the most important commodities worldwide, has shown greater volatility than Bitcoin. Although the fear of losing funds due to volatility remains greater around the cryptocurrency, the figures reflect that oil has been more volatile in recent months.
Since the beginning of 2020, global markets have had to face situations that have significantly affected them. The death of Iranian General Soleimani on the orders of the president of the United States, Donald Trump. Iran’s missile attack on the US military base in Iraq. And, more recently, the outbreak of the coronavirus and its expansion internationally.
Given this events, global markets have reacted, in many cases with the fall of most of their items. In these cases, investors usually decide to spend their funds and protect them in traditionally profitable commodities. Among those who highlight gold and oil.
This is the reason why oil has given the feeling of being a “safe” asset, especially during these months. However, the volatility presented has been greater than that recorded by BTC.
What about the oil?
What happens is that, like some global market assets, oil is also suffering the consequences of the different events that are affecting the world. Specifically for the coronavirus.
The disruption of the supply chain and fears of recession due to the coronavirus are factors that are significantly affecting the price of crude oil.
For example, oil refineries in India have been struggling to buy discount crude destined for China. This in the midst of the decline in demand for Asian economic power caused by the crisis. Thanks to that, the prices of some kinds of crude oil have decreased by up to 15%.
Also the issue of uncertainty is playing an important role in this scenario. The arrival of the virus in the Middle East, the center of the oil industry worldwide, could also affect crude oil prices. If the coronavirus expands sufficiently in the region, oil production worldwide could decrease significantly.
Oil and Bitcoin in figures
This agitation and, in some cases, worldwide panic, is responsible for the variations in the oil market. According to the West Texas Intermediate (WTI), volatility has increased from 38.7% to 119.6%.
On the other hand, Bitcoin, famous for its volatility, has not approached the dramatic figures of the oil market. During the same period of time, variations in the price of the cryptocurrency has decreased from 66% to 42%.
These figures strengthen the arguments of those people who consider Bitcoin as a safe haven similar to gold.
The figures show that, despite the negative conceptions around Bitcoin, it is currently a safer refuge than oil, considered one of the most important commodities worldwide.
Therefore, it is important to be aware of the figures in these markets and how events affect them. Since only in this way can a wise decision be made about which of these assets could perform better.