Volatility and Liquidity: How Bitcoin Compares to its Crypto Competitors

When looking at the combined qualities of liquidity and price stability together as a Commerce Index, we could see other coins catching up with Bitcoin.

If we had included them, you can multiply bitcoin's volumes by 10x to 100x. The liquidity of alternative payment coins has been on a rapid rise in 2016, particularly in the case of monero.

There's an argument here that liquidity can climb quickly upon the introduction of a new currency as can be seen by the steep liquidity growth of bitcoin in its first two years.

In a previous volatility study, I established that bitcoin is well on the path to being the most stable currency in the world, an astounding claim, one that surprised even me.

The study concluded bitcoin would achieve fiat level volatility by mid-2019, which in my opinion is a level that will create a positive feedback loop that leads to more mainstream comfort with the currency.

First up in our alternative payment coin list is monero, the biggest payment coin behind bitcoin.

Dash was pleasantly surprising, showing a volatility reduction in line with bitcoin, and a slowly climbing liquidity rate, that if sustained, could catch bitcoin in one to two years.

In terms of lag, dash is about 18 months behind bitcoin in volatility, but unlikely to catch up if its present trend continues.

Shadowcash, like dash, is making inroads with liquidity, with just over two years to match bitcoin liquidity if 2016 trends can be sustained.

All of bitcoin's competitors tote features that bitcoin is lacking - faster confirmation times and private payments.