Bitcoin Volatility Decline

JPMorgan reports that Bitcoin’s volatility has significantly decreased from approximately 60% at its inception in 2025 to around 30% today. Strategist Nikolaos Panigirtzoglou noted in a recent memo that there is hope for institutional investors to allocate funds to Bitcoin, particularly if its volatility continues to align with that of other assets like gold. He mentioned that over the past year, Bitcoin and gold have experienced a noteworthy convergence in volatility, which is now at a record low.

This decrease is partly attributed to a major withdrawal of Bitcoin by corporate finance professionals during the past year. Currently, MicroStrategy Copycats holds over 6% of Bitcoin’s total supply, increasing its appeal by incorporating it into a global equity index. According to the memo, acquiring Bitcoin helps boost its attractiveness in terms of valuation. Panigirtzoglou explained that for institutional investors, a major consideration is the volatility associated with each asset class—they consume more risk capital when volatility is higher.

At Bitcoin’s current market cap of $2.2 trillion, an increase of 13% would bring the price up to approximately $126,000, a figure slightly above the recent peak reached last weekend. This would align with gold’s $5 trillion private sector investments on a “volatility-adjusted basis.” Panigirtzoglou observed that the gap between Bitcoin and gold’s volatility-adjusted prices has shifted from an advantageous position at the end of 2024—when Bitcoin was around $36,000—to a less favorable scenario now. He indicated that this shift could imply upward potential for Bitcoin.

As of Thursday, Bitcoin was trading roughly 10% lower than its recent all-time high from earlier this month.