bitcoinâs Volatility Hits Record Low: What It Means for Investors
bitcoinâs volatility has reached an all-time low, according to a recent report by Ark Invest. The 30-day moving average for Bitcoin was consistently below 50% in 2024 and early 2025, showing a steady decline.
Some investors may miss Bitcoinâs volatility, as it offers high-risk, high-reward opportunities.Michael Saylor, a prominent Bitcoin advocate, once called Bitcoinâs volatility âa gift to the faithful.â However, Saylorâs company, Strategy (formerly MicroStrategy), benefits from low volatility to avoid potential financial troubles.
despite the drop in volatility, Bitcoinâs annual returns for 2024 reached 122.2%, outperforming gold, bonds, and equities.The Sharpe and Sortino ratio evaluations also show market strength and relatively low risk.
However, the decrease in volatility is paralleled by a reduction in short-term investment revenue.The three best years for Bitcoin returns saw substantially higher returns, indicating that low volatility may not be ideal for high-risk traders.
Low volatility is seen as a sign of Bitcoinâs maturity. A stable price makes Bitcoin viable for daily transactions and increases its potential for wider adoption across businesses. The growing adoption increases liquidity and retail options for customers.
Bitcoinâs derivatives market will further stabilize price fluctuations, establishing it as a reliable settlement tool. Scott Melker, host of The Wolf of All Streets podcast, noted that while Bitcoinâs price became somewhat aligned with major indexes, it still stands out as an uncorrelated asset.
Bitcoinâs ability to recover quickly during market shakeups shows its solid composure. Some experts see this as a sign that headlines are losing their power over the price action.
