Bitcoin Volatility Hits Record Low as U.S. Legislation Boosts Price 75%

Deutsche Bank has released a report stating that as Bitcoin gains wider acceptance among enterprises, retail investors, and governments, its volatility is expected to continue decreasing. This shift is driven by several factors, including favorable regulations, increased institutional adoption, and global macroeconomic changes. The report highlights that Bitcoin's price has surged nearly 75% since mid-November, coinciding with the U.S. government's "Crypto Week," which saw significant legislative activities such as the voting on the CLARITY Act and the GENIUS Act by the U.S. House of Representatives. This legislative push has sparked market enthusiasm, contributing to Bitcoin's recent rise and its volatility reaching a historic low.

The decline in volatility is seen as an indicator of market maturity. As Bitcoin becomes more stable, it is likely to attract long-term asset allocation institutions, enhancing its strategic significance. This trend suggests that Bitcoin may gradually evolve into a more stable and reliable asset, increasing its appeal to sophisticated allocators who demand that their investments work as hard as their cash. The report underscores that as more capital flows into the Bitcoin ecosystem, driven by institutional purchases and regulatory clarity, the market depth is likely to increase, further reducing extreme volatility over time. This development is crucial for Bitcoin's long-term viability and its potential to become a mainstream asset class.

Deutsche Bank believes that the decrease in volatility indicates a maturing market, where regulatory clarity, broader adoption, and long-term investment behavior are making Bitcoin more stable. This German bank pointed out that Bitcoin's recent surge has been driven by the upcoming U.S. crypto legislation, but it is worth noting that this surge has also seen Bitcoin's volatility hit record lows. As mainstream adoption increases and as corporations, retail investors, and governments embrace Bitcoin, Bitcoin's volatility may continue to decrease.