Analysis of Bitcoin’s historical trading behaviour shows it has exchange rate volatility an order of magnitude higher than the volatilities of widely used currencies, undermining its usefulness as a unit of account or a store of value.
Bitcoin’s daily exchange rates exhibit virtually zero correlation with bona fide currencies, making it useless for risk management purposes and exceedingly difficult for its owners to hedge. Bitcoin appears to behave more like a speculative investment than like a currency.
Access this New York University paper here
