Bitcoin: This New Reality That Changes The Game

The realized volatility of Bitcoin (BTC) has steadily decreased since the pandemic, creating challenges for retail speculators. With declining volatility, the chances of achieving high returns through short-term trading diminish. For individual traders, these changes in market behavior are a true nuisance.

Bitcoin Volatility Down: A Challenge for Individual Traders

The low volatility and current stability of Bitcoin reduce opportunities for quick profits for individual traders. Indeed, these market conditions limit the price fluctuations necessary for significant short-term gains, making trading less lucrative for retail speculators who rely on larger price movements.

However, large companies and government entities perceive the situation differently. According to Axel Adler Jr., these institutions are favored by the stabilization of the level of volatility. Companies are now investing in Bitcoin to protect themselves against conventional assets. Even governments are considering using it as a tool for value preservation against inflation.

With the reduction of volatility, the use of Bitcoin is increasing among these entities, which are able to absorb price volatility. This new market environment is causing shifts in the perception of Bitcoin. While retail speculators fail to achieve the desired volatility, institutional investors are discovering new opportunities.

New BTC Dynamics: Stability and Long-Term Investment

This market evolution is beneficial for large companies and governments, who see in Bitcoin’s stability an opportunity for long-term investment. In contrast, individual traders, who depend on volatility to achieve quick profits, find this situation less favorable.

In summary, the decrease in Bitcoin’s volatility limits short-term trading profits for retail speculators, but opens new perspectives for institutional investors. This dynamic could transform the way BTC is perceived and used in the future, solidifying its status as a standalone asset class.