Bitcoin’s current bull market, which began in early 2023, has been characterized by an unexpected stability, a stark contrast to the frenetic volatility that defined its predecessors in 2020-21 and 2017. This newfound steadiness is largely attributed to Bitcoin’s growing market cap and increased institutional involvement, which have helped smooth out the wild swings that once alarmed investors.
A Calmer Sea for Bitcoin
Data from Glassnode reveals that Bitcoin’s realized volatility over a three-month rolling period has averaged below 50% during this bullish phase. Compare this to the dizzying 80% to 100% figures from previous peaks, and the difference becomes clear. The 30-day implied volatility, tracked by Volmex’s BVIV index, mirrors this trend, showing a downtrend that suggests reduced anticipated price turbulence.
“The expansion of Bitcoin’s market capitalization to over $2 trillion has played a crucial role in this transformation,” says a spokesperson from Glassnode. “It now ranks as the 7th largest asset worldwide. As liquidity deepens, the capital needed to significantly move Bitcoin’s price increases, fostering stability.” As explored in our recent coverage of Bitcoin Surges Past $94,000 as Institutional Interest and Market Optimism Grow, this stability is further bolstered by the introduction of U.S. Spot ETF Products, which, alongside growing regulatory clarity, have attracted a new class of investors. Institutional players bring with them not just capital, but also a level of sophistication that tempers the market’s notorious volatility.
The Stair-Step Ascent
The current rally, which saw Bitcoin rise from about $30,000 to over $100,000 since March 2023, has been a stair-step climb. Unlike the steep, heart-stopping pullbacks of more than 30% that punctuated earlier bull runs, this ascent has been marked by more moderate drawdowns, generally less than 25% from local highs.
“Only twice have we seen drawdowns exceed 30% this cycle,” Glassnode notes. This shift can be credited to the reduction in market leverage and speculative behaviors. During past bull markets, exchanges such as Binance offered leverage up to 100X, allowing traders to amplify both profits and losses dramatically. This leverage often led to liquidation cascades, magnifying price corrections.
But times have changed. Major exchanges have since curtailed leverage, reining in the speculative excesses that once fueled erratic price movements. It’s a different landscape now.
Institutional Influence and the Road Ahead
The influx of institutional capital has reshaped Bitcoin trading dynamics. With more sophisticated investors entering the space, the market has matured, becoming less susceptible to the whims of retail-driven speculation. This shift has not only provided a more predictable trading environment but has also encouraged long-term investment strategies. This follows a pattern of institutional adoption, which we detailed in Bitcoin ETFs, gov’t adoption to drive BTC to $1M by 2029: Finance Redefined.
However, while this stability is welcome, it raises questions about the future. Can Bitcoin maintain this steadiness if market conditions change? Will regulatory shifts or technological innovations disrupt this newfound calm? As always in the world of cryptocurrencies, uncertainty lingers just beneath the surface.
The current bull market’s resilience appears to be a testament to Bitcoin’s evolution from a speculative asset to a more mature financial instrument. Yet, as with any market, it remains crucial to stay informed and vigilant, ready to adapt to whatever comes next.
Source
This article is based on: Two Ways This Bitcoin Bull Market is Sturdier Than 2020-21 and 2017
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
