OPINION: Bitcoin Volatility Expected to Continue Declining

With each halving of Bitcoin, its volatility is expected to continue to fall. The next halving is scheduled for 2028, when bitcoin will be four times as scarce as gold.André Dragosch, head of research at the ETC Group, says that volatility will structurally decrease over time as retail and institutional adoption of crypto increases. While the annualized volatility of bitcoin and ethereum is currently around 45% to 50%, compared to around 15% for the SP 500, the volatility of crypto assets is gradually decreasing. For example, Bitcoin's volatility, which was as high as 200% in its initial stages, has recently dropped to 45%. This is largely due to the increased scarcity of Bitcoin, making it more "golden". Dragosch notes that as investor diversity increases, so does the divergence between buyers and sellers, slowing volatility. This trend is expected to continue in the future, especially as crypto assets become more popular and adopted. Investors need to understand that where there is growth, there is volatility, but that volatility is gradually decreasing.