Bitcoin It could be hitting new highs, but the rise in major cryptocurrencies could be much slower than in previous cycles.
That's because the volatility of the largest and oldest digital coins is damp, experts said Decryption. And as assets mature and sophisticated traders make more intelligent bets on Bitcoin, it is unlikely to thrive as quickly as before.
“Think like someone who's working out. A massive spike is like someone who's on a diet to achieve their weight goals and just loses it in three weeks,” said Greg Magadini, director of derivatives at Amberdata.
He added: “But unlike large, bubble-like rallies, slow and stable crushing is sustainable. As Bitcoin grows by market capitalization, it costs more money to move it.”
Bitcoin from previous cycles has sometimes done ridiculous climbs. For example, in 2017, BTC surged to $19,345 in December, resulting in data provider Coingecko showa surge of 2,360% after starting the year at $786.
Flagship cryptocurrency prices strike Friday's new highest of $118,667 has increased about 25% since its launch in 2025, when it was trading at around $93,500. The volatility achieved by BTC is currently at 29.5%, which is 100% for 2021.
The derivatives market shows why. In 2021, the options market was rather small, peaking at over $15 billion in October of that year. In May, BTC's open options contracts surged to more than $42.5 billion in Deribit.
Currently, traders are currently purchasing Bitcoin via funds trading on new exchanges approved last year, Trading functions To them.
It works like this. Investors with many BTC can sell call options (betting on the future price of the asset). Volatility decreases as sophisticated traders use this strategy to sell options that they don't expect to see a big price movement. Traders are broader than adjusting their expectations and bets accordingly.
“We see this in stocks. When the market is bullish, they crush high at a slower pace with less volatility,” Magidini said.
“With (Isshares Bitcoin Trust from BlackRock), we have a new class of market makers with deep pockets that allow warehouse volatility to bet easily,” he added, noting that Bitcoin was previously a small asset class for small market makers.
The asset is currently attracting more mature investors by acquiring Bitcoin space, primarily through new ETFs, Market Observers said. Decryption.
Bitcoin Spot ETF pulled in $1.17 billion on Thursday, the second-largest day since its debut in January 2024, led by BlackRock, Fidelity and Ark Investbest. On Friday, there was about $1.03 billion worth of influx and they remained strong.
Still, the dramatic fluctuations in Bitcoin may not disappear completely.
“I definitely won't rule out periods of high volatility,” said David Lawant, director of research at Falconx. DecryptionHe added that prices will be “confined in a more stringent period.”
