Bitcoin's Price Volatility Drops as Institutional Interest Rises

Bitcoin's latest price was $, in the last 24 hours. The Treasury General Account approaching $850 billion is a significant liquidity signal that could remove a key drag on private-market cash availability. This liquidity, when released, can influence asset prices, including Bitcoin, through increased market liquidity. Market participants monitor this alongside Federal Reserve policy to anticipate price pressure in cryptocurrencies. When the Treasury completes a large TGA build, the reduced fiscal draw on private balances eases the liquidity drain. Analysts like Arthur Hayes argue this change could move Bitcoin into an “up only” phase as liquidity returns. However, opposing views, including research commentary from institutional analysts, indicate the correlation between net liquidity and Bitcoin is inconsistent — the relationship exists but is not deterministic. Short-term price action may diverge: for example, a Fed rate cut can trigger a sell-the-news reaction even as longer-term liquidity supports higher valuations. Traders should weigh timing, Fed signals, and liquidity flows together.

Bitcoin’s increasing appeal to institutional investors may come with a trade-off. As Bitcoin attracts larger players, the associated price volatility tends to diminish, making the market less exciting for retail participants. Michael Saylor, executive chairman of Strategy, explained that as the Bitcoin market matures, the reduced volatility is a positive indicator of the asset settling into its long-term growth trajectory. He views this as a natural phase in Bitcoin’s evolution, a sign of the asset maturing. Saylor considers the reduced volatility a positive indicator of the asset settling into its long-term growth trajectory. The remarks come amid a period of market inactivity, with Bitcoin’s price consolidating after reaching a new high. Market speculation centered on the upcoming Federal Reserve interest rate decision, with some analysts suggesting that additional rate cuts later this year could boost Bitcoin and broader crypto markets. While the September rate cut is largely priced in, expectations of further easing remain among crypto investors.

Crypto enthusiasts are divided on where Bitcoin’s price is headed during the remainder of the year. While some, like BitMEX co-founder Arthur Hayes, forecast a surge toward $250,000, others expect a more modest increase to around $150,000. Conversely, analyst PlanC remains skeptical, suggesting that Bitcoin might not even reach its current all-time high this year. Additionally, Benjamin Cowen has warned of the possibility of a 70% decline from Bitcoin’s peak, emphasizing the unpredictable nature of the market’s short-term moves. Saylor emphasized that ongoing innovation in the Bitcoin space, along with new products and market education, is still in its early stages. He envisions a “digital gold rush” from 2025 to 2035, where numerous business models and financial products will emerge, creating both opportunities and challenges.

Currently, publicly-listed Bitcoin treasury companies collectively hold approximately $118 billion worth of Bitcoin, reflecting the increasing institutional confidence in the asset class. The total illiquid Bitcoin has reached a new high, providing a bullish outlook for the flagship crypto. This refers to the BTC supply that is unlikely to hit the open, given the long-term holding of the investors who own these coins. Glassnode data shows that Bitcoin’s illiquid supply has reached a new high of 14.3 million BTC, marking over 72% of the flagship’s circulating supply. This supply is held by long-term holders (LTHs) who haven’t moved their coins in over seven years, highlighting a strong conviction in the flagship crypto. A large part of Bitcoin’s supply being in the hands of long-term holders is typically bullish, as it continuously reduces the amount of selling pressure on the coin. It could also lead to a potential supply shock, whereby demand outpaces supply.

Asset manager Fidelity stated in a research report that this new demand for BTC, coupled with a fixed supply and decreasing issuance schedule, was what likely sparked the rally to a new all-time high (ATH) above $124,000. Fidelity further predicted that this upward trend for the Bitcoin price could continue in the years ahead. Fidelity highlighted two distinct cohorts that satisfy the threshold of Bitcoin’s illiquid supply. The first is the BTC that was last moved seven or more years ago, while the second is public companies that hold at least 1,000 BTC. Michael Saylor’s Strategy leads the latter as his company currently holds 638,985 BTC, which accounts for over 3% of Bitcoin’s total supply. Strategy hasn’t sold any coin since it began accumulating in 2020. Fidelity predicts that the combined group will hold over six million Bitcoin by the end of 2025 or over 28% of the crypto’s total supply of 21 million. The asset manager noted that BTC’s illiquid supply has only decreased quarter-over-quarter once in its history.

Fidelity predicts that over time, Bitcoin’s scarcity may become the focal point as more entities buy and hold BTC long term. They noted that the illiquid supply could rise drastically if nation-state adoption increases and the regulatory environment continues to evolve. Countries like the U.S. are already looking to establish a Strategic Bitcoin Reserve, which could create a massive supply shock. On the other hand, Fidelity noted that there is the possibility of large amounts of Bitcoin’s illiquid supply being transferred. This could happen as long-term holders and public companies move to realize gains, possibly due to a significant price appreciation. The asset manager earlier mentioned that early signs of potential capitulation may already be emerging as 80,000 ancient BTC were sold in July 2025.