Ark Invest Reports Bitcoin’s Record Low Volatility: Implications and Insights

Bitcoin’s volatility is at its lowest historically, according to Ark Invest’s report. This reduction signals potential maturity for Bitcoin, suggesting it can be used for everyday transactions without substantial price fluctuations. Despite low volatility, Bitcoin’s returns for 2024 were impressive. Saylor views volatility as an opportunity, while stable prices may lead to wider adoption and reduced fluctuations amidst global market turmoil.

Ark Invest’s recent report highlighted Bitcoin’s substantial decrease in volatility, reaching an all-time low during early 2024 and into 2025. The 30-day moving average for Bitcoin’s volatility remained consistently below 50%, suggesting a trend of reduced price fluctuations. Such low volatility raises several implications regarding the stability and maturity of Bitcoin as an asset.

Investors often view volatility as an opportunity, offering chances for substantial profits through high-risk trades. Michael Saylor, a prominent Bitcoin advocate, described this volatility as essential, calling it ‘a gift to the faithful.’ He suggested that those who desire less volatility are often not invested as deeply as true supporters. Yet, Saylor himself benefits from reduced volatility via his company, MicroStrategy, which could suffer significantly if Bitcoin prices drop sharply.

Ark Invest’s findings indicate that despite decreasing volatility, Bitcoin delivered impressive annual returns of 122.2% in 2024, surpassing gold, bonds, and equities. Comparatively, Bitcoin’s Sharpe and Sortino ratios were close to gold, showcasing its market strength with lower risks in comparison to other asset classes. Nonetheless, the report observed a decline in high returns over time, with peak years yielding significantly lower percentages than early years, suggesting investors could face diminishing short-term gains.

The reduced volatility is viewed as a sign of Bitcoin’s maturation, enabling it to function more effectively for daily transactions. Price stability fosters a conducive environment for merchants and consumers, mitigating the adverse effects of rapid price changes on goods and services. Moreover, stable Bitcoin may promote broader acceptance across businesses, increasing liquidity and retail options available to consumers.

The development of the Bitcoin derivatives market should contribute to further stabilisation of prices, reinforcing Bitcoin’s position as a reliable settlement tool rather than solely a speculative asset. This maturity could lead to a more stable support level for Bitcoin prices, free from extreme fluctuations.

Scott Melker, host of the Wolf of All Streets podcast, noted that Bitcoin is increasingly showing resilience amid market turbulence, often aligning with major stock indices, yet retaining its identity as an uncorrelated asset. In early April 2025, amidst global financial instability and increasing tariffs announced by former President Trump, Bitcoin demonstrated a notable ability to recover quickly from market downturns, hinting at a potential diminishing influence of headlines on its price movements. This behaviour indicates a strong presence within a tight price range, suggesting growing stability and enduring composure.