Recent findings indicate that Bitcoin’s reputation for extreme volatility may no longer be accurate.

Bitcoin’s volatility has remained below 50% on 60-day metrics since the beginning of 2023, a trend expected to continue into 2025.

As reported by Kaiko, the decline in realized volatility has continued despite shifts in liquidity conditions and market engagement, marking the asset’s longest period of low volatility on record.

Price growth has coincided with this compression

In 2023, Bitcoin’s price experienced a significant rise while realized volatility decreased by approximately 20%, a trend that persisted into 2024 and the first quarter of 2025 as market capitalization increased.

This combination of rising market value and reduced volatility is prompting comparisons to major, liquid risk assets, even though the absolute level of Bitcoin’s fluctuations remains high.

Bitcoin volatility chart (Source)

The disparity between traditional assets continues to diminish. Last year, iShares estimated Bitcoin’s annualized volatility at around 54%, in contrast to approximately 15.1% for gold and 10.5% for global equities. iShares notes that the multi-year downtrend remains intact, although spot markets still exhibit greater movement than stocks and bullion on a comparable basis.

Asset	Annualized volatility	Source
Bitcoin	~54%	iShares
Gold	~15.1%	iShares
Global equities	~10.5%	iShares

Short-term indicators support this view. BitBo’s volatility dashboard indicates that 30- and 60-day readings are at or near cycle lows, while historical bull-market peaks often exceeded 150% annualized. This shift reflects increased liquidity in derivatives, more systematic trading, and the rise of volatility-selling strategies that mitigate realized movements.

Low volatility does not eliminate drawdown risk

The risk-off event in September 2025 resulted in a loss of approximately $162 billion from the total cryptocurrency market value within days; however, Bitcoin’s percentage drop was less severe than that of many major altcoins, a trend observed in recent corrections.

A broader analysis of cross-market fluctuations reveals that altcoins and DeFi tokens frequently exhibit more than triple Bitcoin’s volatility, which can impact BTC through liquidity shocks. Dispersion remains a key characteristic of the asset class.

Forward-looking indicators highlight two areas of focus: structural positioning and event risk. Fidelity’s analysis suggests that options markets have priced in a higher volatility term structure extending into late 2024 and early 2025, influenced by ETF flows and macroeconomic factors, even as realized volatility remains subdued. According to Fidelity, the gap between implied and realized volatility can close rapidly if flows increase, particularly around significant expirations and funding spikes.

At a micro level, miner economics have served as a trigger for volatility surges. The Puell Multiple, a ratio of revenue to issuance, has typically aligned with phases of miner distribution and accumulation.

Amberdata indicates that readings above approximately 1.2 may coincide with miner selling, contributing to downward pressure, while levels below 0.9 often arise during quieter accumulation periods. Dynamics related to halving cycles and energy costs directly influence this range.

Price-path models that rely on a network effects framework suggest potential trajectories for a low-volatility advance. Power-law models based on Metcalfe-style scaling, referenced by market research, identify interim targets around $130,000 and $163,000, with a late-2025 goal near $200,000.

These projections view the current regime as a transitional phase that could precede significant trend extensions when liquidity increases and marginal buyers return. Such models are sensitive to their inputs, meaning the path will depend on realized network activity, capital flows, and macroeconomic policy outcomes.

The macro factors that significantly influence volatility remain clear

Strength of the dollar, global interest rate trends, and regulatory clarity continue to influence market participation, with institutional adoption benefiting from enhanced market infrastructure. Kaiko notes that the depth of derivatives and on-exchange liquidity has increased, which helps maintain muted realized volatility until a shock necessitates repricing.

Looking ahead, two broad scenarios shape expectations.

If regulatory outcomes, institutional allocations, and consistent liquidity continue, annualized volatility below 50 percent could accompany new highs, resembling the profile of mid-cap technology stocks. Conversely, if macro conditions tighten again or legal uncertainties resurface, realized volatility could revert to previous cycle levels, potentially reaching 80 percent or higher during sharp downturns with forced deleveraging.

These ranges align with case studies summarized by Fidelity and event-driven drawdowns.

Currently, the data indicates a developing volatility profile. Realized measures are near cycle lows, while options returns have the potential to increase if catalysts emerge.

Market participants are monitoring miner profitability ranges, ETF-driven flows, and the policy calendar for the next shift in the regime.

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