When I used to work on the equity trading floor of a large investment bank, the FTSE 100 was our bellwether. Significant market news would move the index and it was exciting to see. This was demonstrated in March this year, when tariffs were announced in the US it sparked concerns over a potential trade war and pushed the equity markets into negative territory. However, the barriers and tariffs came to nothing, the US is open for business again, and the equity markets are in the midst of a massive bull run. Yesterday, the FTSE 100 hit a new all-time high of 7859 points.

In the crypto markets on the other hand, the hype of the end of last year has died down and it has been trading largely sideways (with the odd exception – it is crypto after all!). The bellwether for this market is the price of Bitcoin, when Bitcoin is up, there is a good chance a majority of cryptocurrencies are in the green. That’s for various reasons – partly because Bitcoin is an indicator of overall confidence in the market, and partly because a lot of crypto exchanges trade against Bitcoin in a trading pair. If you want to buy an altcoin, you have to buy Bitcoin first.

Crypto is renowned for its volatility, and it’s true that price movements of 10% in a day are not unusual – a sell-off of that magnitude in the equity markets warrants a Wikipedia page. So it’s a curiosity that in the past two months, the FTSE 100 index has risen 900 points, which equates to over 13%. In the same time period, Bitcoin has risen only around 2% from $8,100 to $8,300.

Is this the first signs of a long-term reduction in volatility of crypto or the calm before the storm?

*Update – 23rd May* – In the 24 hours since I wrote this post, the price of Bitcoin has dropped by over 5% to $7,800. The market never fails to surprise! My personal opinion is that sometimes small movements – especially losses – become amplified as stop-loss safeguards get triggered (especially after a bull run). Normal rules definitely do not apply in crypto..