In this video: People say Bitcoin is too volatile — and looking at today’s price action, that sounds fair. Bitcoin’s down more than 30%, fear is everywhere, and calls for another crash are getting louder. But what if Bitcoin’s volatility isn’t the problem at all? What if misunderstanding that volatility is the real reason people keep losing money every cycle? Video by Mark Moss.
Bitcoin is well-known for its price volatility, driven by factors like supply and demand dynamics, investor actions, and regulatory news. While its volatility remains high compared to traditional assets like stocks and bonds, it has generally trended downward as the market matures and institutional investment increases.
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Key Insights
Maturing Market: Bitcoin's volatility has decreased over its lifetime, with annualized volatility in 2025 going as low as 23% compared to an all-time high of 181% in 2013. This is attributed to increased market maturity, higher liquidity from institutional investors, and regulatory clarity (e.g., spot ETF approvals).
Current Price Movement: As of December 23, 2025, Bitcoin's price has been range-bound between approximately $85,000 support and $93,000 resistance as year-end de-risking and thinning liquidity push traders to the sidelines. It is currently trading around $87,000 USD.
Influencing Factors: Key drivers of volatility include the fixed supply of 21 million coins, significant actions by large investors ("whales"), media coverage, and global macroeconomic events like interest rate changes.
Future Outlook: While the long-term trend suggests lower volatility, the current period of compressed volatility may precede a major price movement. Some analysts predict a potential fall to $60,000–$65,000 in early 2026, while others remain long-term bullish, forecasting prices as high as $250,000.
Risk vs. Return: Historically, the high volatility has been accompanied by high returns, with a Sharpe ratio that is nearly double that of the S&P 500 from 2020 to early 2024, indicating investors have been compensated for the risk.
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