Volatility is opportunity

CEO of Poder Wealth Advisors and host of the Financial Powerhouse Podcast, Anna N’Jie-Konte is a globally recognized financial planner who specializes in helping women achieve financial independence. In partnership with CoinShares, she debunks four common myths about Bitcoin. Second one: Bitcoin is too volatile.

Bitcoin’s volatility remains higher than that of traditional equities, but it has measurably declined as the market matured. Peak-to-trough swings of around 80% in 2017 have reduced to less than 50% by March 2024.1 Studies show that while Bitcoin is still several times more volatile than gold or global equities, it now operates in a range similar to large-cap technology stocks commonly found in client portfolios. Moreover, a gap exists between implied and realized volatility, indicating that markets tend to overestimate Bitcoin’s risk.

Historical returns have been strong, with annualized gains of roughly 50% and a Sharpe ratio that outperformed the S&P 500 between 2020 and 2024.¹ 

Allocations should match client risk tolerance, smaller positions of 1–3% for conservative investors can improve diversification without undue risk, while more aggressive investors might take on higher exposureHere, Anna explains that while Bitcoin acts this way, that volatility is decreasing and manageable within a diversified investment portfolio, especially when put in context with client goals.

Key takeaways

• Volatility trends: Bitcoin’s price swings have declined significantly, from 80% in 2017 to below 50% by 2020.¹

• Relative risk: A 2024 study shows Bitcoin’s volatility is now on par with large-cap tech stocks like Tesla or Meta.

• Market mispricing: traders often overestimate Bitcoin’s volatility, implying an opportunity for informed investors.

• Returns vs. risk: Bitcoin has offered strong risk-adjusted returns, with a Sharpe ratio of 0.96 and a CAGR of 58% (2020–2024).¹

• Client fit: Even a 1–3% allocation can benefit conservative investors via diversification.

¹ Source: Bloomberg, CoinShares, data available as of close 28th May 2025