Stock market investors are now significantly less confident than their cryptocurrency peers, as weakening artificial intelligence (AI) sentiment weighs on risk assets.
U.S. chipmakers have lost roughly 20% over a two-week period; meanwhile, NASDAQ-100 recorded its worst weekly performance since the tariff turmoil in April 2025, according to data shared with Finbold on October 21 from crypto analytics firm Block Scholes.
As a result, the Cboe Volatility Index (VIX), which measures expected volatility in the S&P 500, reached its highest level since the Federal Reserve’s meeting this July. By contrast, Bitcoin (BTC) has remained resilient and consolidated around $80,000-$84,000 despite historically high volatility this time of year.
“Seasonal patterns in Bitcoin volatility have historically shown a lull over the summer months. That lull has tended to break in the fourth quarter, with BTC volatility picking up in each of the last five years, usually by early November,” Thahbib Rahman, research analyst at Block Scholes, told Finbold.
Is crypto volatility cooling?
The above-mentioned divergence between equities and digital assets suggests that traditional stock market investors are becoming more anxious about a potential downturn than Bitcoin traders.
Options markets further highlight the difference. Notably, Bitcoin’s seven-day implied volatility edged up from just below 30% to around 33% over the weekend. Ethereum (ETH), however, experienced a much sharper increase, with its implied volatility rising by nearly 10 percentage points.
“Following that pattern and with the US midterm elections on 3 November, ongoing macro and geopolitical tensions and FOMC meetings in both late October and December, there are significant events in the calendar ahead that could see implied volatility pick up. For now, options markets are not quite pricing that in,” Rahman added.
Compared with the VIX, Bitcoin’s implied volatility is now less than twice that of the S&P 500. For context, the ratio has typically been closer to three times since 2021. In other words, the data might be indicating that BTC´s expected volatility relative to equities has declined.
Crypto investors are not completely without worries
However, none of that is to say that crypto traders are entirely comfortable compared to stock market investors. Notably, options traders are increasingly seeking downside protection, with the seven-day put-call skew for ETH reaching an eight-volatility-point premium for puts over calls during the weekend.
What this suggests is that while Bitcoin has so far weathered the turbulence better than many traditional risk assets, the rising demand for crypto downside protection shows that traders remain alert, perhaps even expecting a sell-off.
The key question now is thus whether rising anxiety in equity markets will develop into outright panic due to geopolitical uncertainty and AI risks and whether crypto can maintain its relative resilience if conditions deteriorate further.
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