tl;dr
Since the introduction of spot Bitcoin ETFs in January 2024, Bitcoin's price volatility has dropped to its lowest levels, with 90-day rolling volatility falling below 40 from previously above 60. Bitcoin's volatility is now less than twice that of gold, indicating increased market stability. This sh...
Bitcoin’s trading patterns are undergoing a significant transformation, largely influenced by the emergence of spot exchange-traded funds (ETFs). Since the introduction of these ETFs in January 2024, Bitcoin’s price volatility has decreased to unprecedented lows, marking a new phase in its market behavior.
On August 4, Bloomberg ETF analyst Eric Balchunas highlighted a remarkable drop in Bitcoin’s 90-day rolling volatility, which has fallen below 40—its lowest level since the ETFs debuted. Previously, this metric had hovered above 60, underscoring the dramatic calming of Bitcoin’s price swings.
Balchunas drew a compelling comparison between Bitcoin and gold, noting that Bitcoin’s current volatility is now less than twice that of gold. This is a stark contrast to former times when Bitcoin’s volatility was more than three times that of gold. This shift suggests that Bitcoin is entering a period of greater stability.
This newfound steadiness could signify a long-term evolution in Bitcoin’s market dynamics. Rather than enduring the wild, extreme fluctuations characterized by explosive bull markets followed by harsh crashes, Bitcoin may now experience more measured and moderate price movements.
Moreover, this increased stability has made Bitcoin more appealing to large-scale investors. Balchunas argues that it also substantially improves Bitcoin’s potential for adoption as a viable medium of exchange, moving it closer to mainstream financial acceptance.