AI Frenzy: Bitcoin Less Volatile Than South Korean Stocks

Amidst the geopolitical tensions that are putting pressure on bitcoin and the broader cryptocurrency market, we've analyzed an intriguing data point that highlights the darker side of this year's AI frenzy.

The Korean Stock Exchange, a key beneficiary of this phenomenon, has fallen by nearly 25% in just four weeks.

Options show that this exchange is viewed as at least twice as risky as bitcoin, a decentralized asset that has frequently been criticized for its extreme volatility.

This is reflected in the one-month implied volatility index (IV), which has surpassed 80%, more than triple the Bitcoin's one-month implied volatility index (BVIV).

This increase in option demand may be a warning sign for other global markets where the AI frenzy has driven unprecedented risk.

For bitcoin advocates, the reality that the asset is more stable than the Korean Stock Exchange is a triumph, but it is still twice as volatile and risky as the S&P 500 index.

In this sense, the true miracle for bitcoin supporters will come when the VIX becomes more expensive than the BVIV.

Meanwhile, the price of bitcoin remains under pressure, trading below its 50-day moving average, although there is a glimmer of optimism.

According to analysis firm Nansen, portfolios that used to be the first and most active movers during geopolitical incidents haven't significantly changed their risk profile.