Bitcoin News Today: Bitcoin’s Quiet Metamorphosis: From Wild Ride to Institutional Gold Standard

Bitcoin’s volatility has fallen sharply in recent months, drawing renewed interest from institutional investors who have historically been wary of the cryptocurrency’s unpredictable swings. According to strategists at JPMorgan, the annualized volatility of Bitcoin has declined from approximately 60 percent at the start of 2025 to around 30 percent [1]. This shift is being attributed to a combination of reduced speculative activity and increased corporate participation in the market.

The reduced volatility is attributed, in part, to the passive holding of Bitcoin by corporate entities. As companies continue to accumulate and hold Bitcoin in their portfolios, the circulating supply available for speculative trading has effectively decreased, which in turn suppresses price swings [1]. This trend has made Bitcoin more appealing from a risk management perspective, particularly for institutional investors who rely on predictable volatility levels to allocate risk capital efficiently [1].

Nikolaos Panigirtzoglou, a strategist at JPMorgan, highlighted that the volatility of Bitcoin is converging with that of gold, a traditional safe-haven asset. The narrowing gap suggests that Bitcoin could eventually attract institutional investment levels comparable to gold. At present, however, Bitcoin’s market capitalization of approximately $2.2 trillion is significantly lower than the $5 trillion in private gold investments when adjusted for volatility [1]. To bridge this gap on a volatility-adjusted basis, Bitcoin would need to rise to around $126,000, a level that is modestly above its recent peak [1].

This volatility-adjusted analysis reveals that Bitcoin is currently undervalued in comparison to gold. At the end of 2024, Bitcoin was overvalued in this metric, but the current valuation suggests it is trading at a discount. According to Panigirtzoglou, the cryptocurrency is about $16,000 too low in this comparison, which implies upward potential for Bitcoin in the coming months [1]. As of 5:15 p.m. on the day of the report, Bitcoin was trading at $108,640 [1].

The implications of this volatility decline extend beyond institutional interest. With Bitcoin becoming increasingly less volatile, it may also attract a broader range of investors, including those who previously avoided the asset due to its price swings. However, any investment decisions should be based on a comprehensive understanding of market conditions and individual risk tolerance [1].

Source: [1] Halving of bitcoin volatility makes cryptocurrency more attractive to institutional investors (https://www.marketscreener.com/news/halving-of-bitcoin-volatility-makes-cryptocurrency-more-attractive-to-institutional-investors-ce7c50dddc88f723)