Bitcoin volatility hits record low as ETFs influence market conditions

Bitcoin’s trading patterns are shifting significantly, as spot exchange-traded funds (ETFs) reshape the landscape.

Since their launch in January 2024, Bitcoin’s price volatility has declined to levels not seen before.

On August 4, Bloomberg ETF analyst Eric Balchunas pointed out that Bitcoin’s 90-day rolling volatility has now fallen below 40, its lowest point since the ETFs launched. At that time, the metric was above 60.

Bitcoin’s Declining Volatility vs Gold (Source: Balchunas/X)

The analyst compared this drop to gold’s volatility, noting that Bitcoin’s volatility is now less than double that of gold, compared to being more than three times higher in the past.

This newfound stability could signal a long-term evolution in Bitcoin’s behavior. According to Balchunas, the era of extreme price swings, marked by explosive bull runs followed by painful crashes, may be giving way to more moderate price movements.

Balchunas also pointed out that this stability has helped make Bitcoin more attractive to large-scale investors and has drastically improved its chances of being adopted as a medium of exchange.

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