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Although Bitcoin continues to break through historical highs and then quickly pulls back, this world’s number one cryptocurrency is increasingly showing the characteristics of a mature asset class, and its continued decline in volatility is the core signal.
Bitcoin has long been regarded as one of the most volatile financial assets, and the drastic price volatility over the years has discouraged many investors.But what would you think if you told you that Bitcoin’s volatility is now lower than that of blue-chip technology stocks?
According to ecoinometrics data,Bitcoin’s current 30-day real volatility has dropped to its lowest level in the past five yearsEven though Bitcoin has experienced multiple headline ups and pullbacks over the past five years, this trend continues: “This is exactly what mature assets should do.”
Since 2022, Bitcoin’s volatility has often been lower than that of some Wall Street giants, including large-cap stocks such as Nvidia.During the period of sharp fluctuations in the technology sector from 2023 to 2024, Bitcoin, which is famous for its “significant volatility”, has a higher price predictability than Nvidia.
Even in the current Bitcoin bull market, price fluctuations are significantly milder than those in previous cycles..Macro analyst Lyn Alden recently told CryptoSlate that she believes the Bitcoin cycle is changing.
She believes that this cycle may “last longer and fluctuate more slowly” than before. After a strong upward momentum, it will enter a consolidation period, “rather than hitting straight to the high point and then plummeting.”
The decline in volatility is just one of the signs of Bitcoin’s increase in maturity.The launch of the US Bitcoin spot ETF in early 2024 was a milestone event, which opened the door to mainstream investors.
Large asset management institutions such as BlackRock and Fidelity provide retail investors and institutional investors with channels to directly contact Bitcoin assets through regulated exchange trading products.This not only expands the holding group of Bitcoin and improves liquidity, but also curbs large price fluctuations and promotes Bitcoin to integrate into the traditional market more deeply.
also,Recent regulatory adjustments allow Americans to include Bitcoin in 401k retirement accounts.As diversified portfolios gradually allocate Bitcoin, its volatility has further decreased.
Pension funds, endowments and insurance companies have also begun to incorporate Bitcoin into alternative asset strategies.The participation of such mature investors increases rational trading and weakens the impact of short-term speculative funds on prices.
In the period of risk appetite and risk aversion, the correlation between Bitcoin prices and the broader stock market is increasing, which is another signal of its integration into the mainstream and maturity.While you may question whether this fits Bitcoin’s initial positioning, it does reflect the mainstream market’s acceptance of it.A strong-willed child will eventually grow into an adult who changes the world, and Bitcoin is undoubtedly experiencing such transformation.
Whether it is an ordinary investor or an institution, a decline in Bitcoin volatility means lower risks and a more stable investment experience..
This trend also shows that Bitcoin is moving away from the crazy speculative volatility and turmoil of its teenage years and gradually establishing its position as a legitimate member of society and an important part of its diversified portfolio.It’s time to admit that our “children” have grown up.
