Bitcoin

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Recent data from MarketVector has <a href="https://twitter.com/i/bookmarks?post_id=1752348613559177340" rel="noopener noreferrer nofollow">shown</a> a significant downturn in the volatility across various sectors of the cryptocurrency market, with Bitcoin (BTC) leading the way.&nbsp;
The 90-day annualized volatility for Bitcoin has seen a notable decline, reflecting a trend that has been observed throughout the past year.
This downtrend is being observed across the board: centralized exchanges, infrastructure applications, media, and entertainment, decentralized finance, and smart contract platforms have all reported similar reductions in their volatility measures.&nbsp;
Analysts point to the approval of spot Bitcoin ETFs earlier this month as a key factor contributing to this stabilization.
<h2 id="etfs-and-the-stability-of-bitcoin">ETFs and the stability of Bitcoin</h2>
The introduction of US Bitcoin spot exchange-traded Funds (ETFs) has been a game-changer in the crypto market, leading to a historic <a href="https://twitter.com/laurashin/status/1752205405516595525" rel="noopener noreferrer nofollow">low</a> in Bitcoin's 12-month volatility.&nbsp;
With the ETFs expected to continue smoothing Bitcoin's price fluctuations, the market is witnessing a shift towards more stable trading conditions.&nbsp;
The annualized volatility of Bitcoin has dropped from its peak of 179% in January 2012 to just 45% in January 2024.
This newfound stability could be indicative of a trend towards long-term holding among investors (as opposed to the short-term speculative trading that has historically characterized the crypto market).
<h2 id="long-term-holding-over-speculative-trading">Long-term holding over speculative trading</h2>
The decrease in <a href="https://u.today/bitcoin-btc-volatility-drops-to-historic-low-turbulence-coming" rel="noopener noreferrer nofollow">volatility</a> suggests that Bitcoin is maturing as an asset class, becoming more appealing to long-term investors.&nbsp;
Experts believe that as more spot Bitcoin ETFs are launched and incorporated into advisors' portfolios, a substantial amount of Bitcoin will be held in long-term investment accounts.&nbsp;
This trend is expected to be a major factor in dampening market volatility since advisors generally do not engage in frequent trading.

Key Reason Why Bitcoin (BTC) Volatility Has Collapsed

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