Lower Bitcoin Volatility Limits Short-Term Trading Profits

Realized volatility in Bitcoin ($BTC) has been steadily decreasing since the pandemic. This shift is creating challenges for retail speculators. With decreasing volatility, the chances for earning high revenues through short-term operations decrease. To the individual traders, such changes in market behaviour are a nuisance.

Realized volatility has been decreasing post-pandemic. This is bad for retail speculators but beneficial for large corporate and government entities that have started viewing Bitcoin as an asset class. pic.twitter.com/Z2TgyaNYu6

— Axel 💎🙌 Adler Jr (@AxelAdlerJr) November 23, 2024

Stable Bitcoin Volatility Boosts Institutional Interest, Says Analyst

However, large corporate and government entities are perceiving the situation differently. In the opinion of Axel Adler Jr., a research analyst at CryptoQuant, such institutions are favored by the stabilization of the volatility level. Because of this fluctuating price, Bitcoin is regarded by many as a risky investment when prices are comparatively stable. Furthermore, it is becoming evident that Bitcoin is a real asset class.

Business entities are investing in Bitcoin to act as a hedge against the conventional assets. Even governments are thinking over it as a tool for preserving value against the inflation. As volatility reduces, the use of Bitcoin increases among these entities, which are capable of absorbing the price volatility.

Bitcoin Gains Recognition as a Long-Term Asset for Institutions

This changing market environment is causing new shifts in the perception of Bitcoin. While the retail speculators thus fail to achieve the desired volatility, the institutional investors are discovering new opportunities. The emerging trend indicates that the use of Bitcoin is becoming more as an instrument of financial investment. It is becoming more than just a speculative tool, with long-term value being recognized by larger players in the financial world.

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