Despite Bitcoin rising 30% this year, many investors are finding the market to be relatively calm. Known for its rollercoaster-like volatility, Bitcoin has not experienced extreme price swings recently, leading investors to seek more excitement.
“This has been the most boring cycle of all time,” said TraderKoz, a partner at venture studio Kelsier. Philipp Pieper, co-founder of tokenization platform Swarm, echoed that sentiment, noting that the market lacked the wild volatility seen in previous cycles.
In a market that has historically thrived on unpredictability, this newfound calm is unusual. While recent macroeconomic factors like Fed policy and the upcoming US election have caused some price fluctuations, Bitcoin’s volatility overall has decreased significantly. According to Kaiko, Bitcoin’s price has moved much less in recent months compared to the same period last year.
Fidelity found that Bitcoin has been nearly four times more volatile than 11 other asset classes over the past four years. That’s a notable shift despite Bitcoin’s smaller market cap of around $2 trillion compared to the bond market’s size in the hundreds of trillions.
Many attribute the calmer market to the entry of institutional investors. Cole Kennelly, CEO of crypto index provider Volmex, said major firms like BlackRock are both boosting cryptocurrency prices and balancing volatility. The launch of new Bitcoin and Ethereum spot ETF options is expected to attract more institutional investors, further smoothing out price swings.
Pieper points to the increasing number of crypto ETFs as another factor behind the drop in volatility. As crypto markets become more integrated with traditional finance, price movements have become less erratic.
While the lack of excitement has disappointed some investors, experts believe it’s a positive sign for long-term growth. Pieper predicts that Bitcoin could surpass $100,000 in the coming years, but that would require significant capital infusion.
*This is not investment advice.