Bitcoin’s Volatility Calms Down: Is It Becoming More Like Traditional Assets?

Bitcoin’s price swings have been unusually subdued since the beginning of 2023, staying below a 50% threshold when measured over 60-day periods. This trend has continued throughout 2025, marking an extended period of relative stability for the digital currency.

Analytics firm Kaiko notes that this decreased volatility has persisted even as trading activity and the overall liquidity in the market have fluctuated. This has placed Bitcoin in its longest stretch of low volatility ever recorded.

Interestingly, this period of reduced volatility has coincided with an increase in Bitcoin’s price. In 2023, Bitcoin’s value climbed significantly while its realized volatility dropped by approximately 20%. This pattern continued into 2024 and the first quarter of 2025, alongside growth in market capitalization.

This combination of a larger market value and lower volatility is leading to comparisons between Bitcoin and more established, liquid assets. While Bitcoin’s price movements are still more pronounced than those of traditional assets, the difference is shrinking.

Last year, iShares calculated Bitcoin’s annualized volatility to be around 54%, compared to roughly 15.1% for gold and 10.5% for global stocks. iShares believes this downtrend is firmly in place, even though Bitcoin still exhibits greater price fluctuations than stocks and precious metals on a direct comparison.

Short-term analyses support this overall picture. The BitBo volatility dashboard shows 30- and 60-day volatility metrics near their lowest points in the current market cycle. Historically, bull market peaks have often seen annualized volatility exceeding 150%. This shift reflects greater liquidity in the derivatives market, more sophisticated trading strategies, and the growth of strategies designed to profit from and therefore dampen volatility.

However, low volatility doesn’t eliminate the risk of market corrections. The risk-off event in September 2025 wiped out approximately $162 billion from the total value of the cryptocurrency market in a matter of days. During this period, Bitcoin’s percentage decline was less severe than that of many smaller altcoins, a trend observed in other recent market corrections.

Across the broader cryptocurrency market, altcoins and DeFi tokens often experience volatility more than three times that of Bitcoin. These fluctuations can impact Bitcoin’s price due to liquidity transfers. This variation in volatility remains a key characteristic of the broader cryptocurrency asset class.

Looking ahead, analysts are focusing on two primary areas: structural positioning and event risk. Fidelity Investments points to options markets that had priced in higher volatility expectations for late 2024 and early 2025, driven by potential ETF flows and macroeconomic events, even as actual volatility remained low. Fidelity suggests that this gap between expected and actual volatility could close rapidly if inflows accelerate, especially around large options expirations and spikes in funding rates.

On a smaller scale, the financial health of Bitcoin miners can also trigger volatility. The Puell Multiple, which compares miner revenue to the amount of Bitcoin issued, often correlates with miner selling or accumulation patterns.

Data from Amberdata suggests that a Puell Multiple above approximately 1.2 may coincide with miner selling, increasing downward pressure on prices. Conversely, levels below 0.9 often occur during periods of miner accumulation. Halving events (which reduce the rate at which new Bitcoin are created) and changes in energy costs directly influence this range.

Some price models that consider network effects suggest that a sustained period of low volatility could lead to further price increases. Power-law frameworks based on Metcalfe’s Law, which relate the value of a network to the square of the number of users, project potential interim price targets of around $130,000 and $163,000, with a target near $200,000 by late 2025.

These models view the current stability as a transition phase that could precede significant price increases as liquidity improves and new buyers enter the market. However, these models are highly sensitive to the data they are based on. Therefore, the actual path will depend on network activity, capital flows, and macroeconomic policies.

The most important macroeconomic factors affecting Bitcoin’s volatility are straightforward: The strength of the US dollar, global interest rate trends, and regulatory clarity all influence participation in the market, with institutional adoption relying on the expansion of market infrastructure. Kaiko notes that increased derivatives market depth and on-exchange liquidity help to suppress volatility until a major event triggers a price correction.

Looking forward, two main scenarios are shaping expectations:

If favorable regulations, institutional investment, and consistent liquidity continue, annualized volatility could remain below 50% even as Bitcoin reaches new all-time highs, similar to the behavior of mid-cap technology stocks. Alternatively, if macroeconomic conditions tighten or regulatory uncertainty returns, volatility could revert to levels seen in previous market cycles, potentially reaching 80% or higher during sharp declines.

These possibilities align with past market studies and event-driven drawdowns. The current data suggests a maturing volatility profile, with volatility near cycle lows and room for potential increases if catalysts emerge.

Market participants are closely monitoring miner profitability, ETF-driven flows, and upcoming policy announcements for signs of a change in the current volatility regime.

Source: CryptoSlate

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