As might be expected, Tuesday’s Senate hearing on cryptocurrency regulation touched on an oft-discussed facet of digital assets: their price volatility.

Appearing before the Senate Banking Committee, Securities and Exchange Commission chair Jay Clayton and Commodity Futures Trading Commission chair J. Christopher Giancarlo were asked about their views on the zigzagging prices, as well as the factors driving those price changes.

Ultimately, both demurred on offering a definitive point, though Giancarlo, whose agency regulates derivatives, pointed out that volatility in bitcoin isn’t quite up to par with the VIX Index, known more commonly as the “fear index.”

“Bitcoin’s volatility was not as large as other asset classes like [the] VIX. We have seen extreme volatility in bitcoin but in our world [commodities], we are used to volatility in asset classes,” he remarked.

Clayton was blunt in his answer to the question of why prices are volatile: “I don’t really know what’s driving volatility in bitcoin and cryptocurrencies,” he said, going on to remark:

“[Cryptocurrencies are] not correlated with sovereign currencies, so it must be something different than what would move the dollar. But that’s one of the issues before us – there does appear to be a lot of volatility compared to the medium they are supposed to be replacing.”

Asked whether derivatives products like exchange-traded funds could help stabilize bitcoin’s wild price fluctuations, Clayton said it would depend on the investors.

Clayton went so far as to suggest that the agency might one day green-light such a financial product, a notable comment given that the SEC shot down the ETF proposed by investors Cameron and Tyler Winklevoss (that effort remains subject to an appeal).

“If we get comfortable … then we can move forward,” he said.

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