This paper explores Bitcoin’s volatility characteristics using the GARCH volatility model. The volatility characteristics of Bitcoin are compared with the gold commodity and the US dollar volatility characteristics. The purpose is to identify similarities and differences between Bitcoin, the gold and the US dollar between 2016/04/01 –2021/04/01. The attention for cryptocurrencies and especially the Bitcoin has risen rapidly the last couple of months which makes the analysis appropriate and current. The results showed that Bitcoin’s past returns affect future volatility substantially more than past returns affect future volatility of gold and the EUR/USD for the period. The volatility behavior of Bitcoin was more similar to the volatility behavior of the gold than the EUR/USD. However, it should be highlighted that Bitcoin still behaves rather unique than as a commodity. The volatility results found that Bitcoin’s volatility is persistent over time and can therefore explain volatility today as well as for the near future. The highly volatile time periods of Bitcoin can be explained by optimism and overconfidence bias. This bias connects overly confident investment decisions to less accurate returns. Bitcoin is still new to the financial market which makes information scarce, hence a small piece of good or bad news affect the price of one Bitcoin appreciably.