Source: cryptoslate

Translation: Blockchain Knight

Despite Bitcoin continuously breaking historical highs and then quickly retracing, this leading global cryptocurrency is increasingly exhibiting characteristics of a mature asset class, with its volatility steadily declining being a core signal.

For a long time, Bitcoin has been regarded as one of the most volatile financial assets, with dramatic price fluctuations over the years deterring many investors. But what would you think if I told you that Bitcoin's volatility is now lower than that of blue-chip tech stocks?

According to ecoinometrics data, Bitcoin's current 30-day realized volatility has dropped to its lowest level in nearly five years, even though Bitcoin has experienced multiple headline-making rises and retracements over the past five years, this trend continues: "This is exactly how a mature asset should behave."

Since 2022, Bitcoin's volatility has often been lower than that of some Wall Street giants, including large-cap stocks like Nvidia. During the significant fluctuations in the tech sector from 2023 to 2024, Bitcoin, known for its "extreme volatility," has shown greater price predictability than Nvidia.

Even in the current Bitcoin bull market, price fluctuations are noticeably milder than in previous cycles. Macro analyst Lyn Alden recently told CryptoSlate that she believes Bitcoin's cycle is changing.

She thinks this cycle may "last longer and be less volatile" than before, entering a consolidation phase after strong upward momentum, "rather than crashing after a sharp rise."

The decline in volatility is just one sign of Bitcoin's increasing maturity. The launch of the Bitcoin spot ETF in the U.S. in early 2024 is a milestone event that opens the door for this asset to mainstream investors.

Large asset management firms like BlackRock and Fidelity are providing retail and institutional investors with direct access to Bitcoin assets through regulated exchange-traded products. This not only expands the pool of Bitcoin holders and enhances liquidity but also curbs significant price fluctuations, driving Bitcoin deeper into traditional markets.

Additionally, recent regulatory policy adjustments allow Americans to include Bitcoin in their 401k retirement accounts. As diversified portfolios gradually allocate Bitcoin, its volatility further decreases.

Pension funds, endowment funds, and insurance companies have also begun incorporating Bitcoin into alternative asset strategies. The participation of these mature investors increases rational trading and mitigates the impact of short-term speculative funds on prices.

During periods of risk appetite and risk aversion, the correlation between Bitcoin prices and the broader stock market is increasing, which is another signal of its integration into the mainstream and maturation. While you may question whether this aligns with Bitcoin's original positioning, it indeed reflects the mainstream market's acceptance of it. A determined child will eventually grow into an adult who changes the world, and Bitcoin is undoubtedly undergoing such a transformation.

For both ordinary investors and institutions, the decline in Bitcoin's volatility means reduced risk and a smoother investment experience.

This trend also indicates that Bitcoin is shedding the wild speculative fluctuations and turmoil of its teenage years, gradually establishing itself as a legitimate member of society and an important component of diversified investment portfolios. It is time to acknowledge that our "child" has grown up.

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