Bitcoin's Volatility Decreases 60% as Institutional Interest Grows

Philippe Laffont, the founder of Coatue Management, recently spoke at a summit in New York City, highlighting the evolving role of Bitcoin in traditional investment portfolios. Laffont noted that Bitcoin's volatility, once a significant deterrent, has been decreasing, making it a more attractive asset for institutional investors. He observed that the asset's price behavior is beginning to resemble that of more established markets, indicating a shift from speculative to foundational status.

Laffont explained that Coatue Management initially avoided Bitcoin due to its high volatility. However, the firm's perspective has changed as the asset's volatility has decreased. Laffont mentioned that the cost of entering the Bitcoin market is shrinking, making it more accessible for traditional investors. He also noted that the beta of Bitcoin, a measure of its volatility relative to the broader market, is decreasing, which is a positive sign for institutional investors.

Laffont pointed out that Bitcoin has shown more controlled price movements in recent years. For instance, in 2022, Bitcoin lost more than 60% of its value, while the Nasdaq Composite dropped 33%. However, in April 2025, after new tariffs were announced, Bitcoin dropped about 5%, while the Nasdaq fell over 6%. This performance indicates that Bitcoin is maturing as an asset.

Laffont also noted a change in the behavior of Bitcoin holders. There has been a sharp decline in the number of Bitcoin wallets that sell their entire holdings after just one month. This trend suggests that more holders are staying invested for the long term, which is a critical change in market dynamics. This shift is also reflected in the involvement of big names in the industry, such as BlackRock, which has played a leading role in bringing Bitcoin ETFs to the market.

Laffont believes that this trend is pushing Bitcoin toward becoming a necessary part of portfolios. He noted that Bitcoin represents only about $2 trillion out of the world's $500 trillion in total wealth, but its growth potential is still huge. He also mentioned that Coatue Management has investments in both private and public companies in the crypto space, including Dune Analytics, Hut 8, and CoreWeave.

Laffont admitted that he regrets not investing more in Bitcoin earlier. He blamed his delay on overthinking and focusing too much on complex theories and debates about use cases. He now advises investors to consider putting a small percentage of their assets into Bitcoin as a way to protect themselves from inflation. He also warned people not to make Bitcoin the center of their portfolios, advising them to keep it small and steady.

Laffont described how his clients fall into three groups: those who trust him and don't ask questions, those who confront him with questions about missing the biggest trends, and the cautious ones who are still uncomfortable with anything crypto-related. He noted that the latter group is getting fewer every year. He also advised investors to keep their Bitcoin positions small and steady, as they are more likely to make money in the long run.