The volatility of Bitcoin has fallen to a two-year low, will TradFi entering the market make BTC prices more stable?

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In the past two months, the price of Bitcoin has fluctuated within a large range, and the Bitcoin volatility index (DVOL) has dropped to its lowest point in two years, while the on-chain trading volume of Bitcoin has decreased. Funds from traditional finance such as Bitcoin reserves and Bitcoin ETFs continue to increase, beginning to change the Bitcoin trading market. Will the annual increase of Bitcoin become smaller and turn it into a more attractive retirement asset?

Bitcoin volatility has dropped to a two-year low.

Deribit's Bitcoin Fluctuation Index (DVOL) has dropped to 38.97, the lowest value since October 2023. This index monitors the expected annualized volatility of Bitcoin over the next 30 days, indicating that the investment nature of Bitcoin is decreasing.

An increase in implied volatility typically indicates that market participants are uncertain about price trends, and traders are often willing to pay more to protect existing positions or speculate on potential price movements—whether up or down. Lower readings suggest that market observers expect prices to remain stable.

Bitcoin on-chain volume decreases

In addition to the decrease in volatility, data from The Block shows that the monthly trading volume on the Bitcoin network in June fell by 15% compared to May, marking the lowest monthly trading volume since October 2023.

Bitcoin has only been consolidating in a range for the past two months.

Since Bitcoin first emerged in 2009, traders have been attracted to this primitive cryptocurrency, viewing it as a way to make quick profits through arbitrage and directional trading. However, as volatility has decreased, many have found that profit opportunities are becoming fewer and farther between. Bitcoin surged more than double each year in the first two years and is expected to rise by about 17% in 2025.

In the past two months, the trading price of Bitcoin has fluctuated between $93,000 and $111,000, which is one of the narrowest ranges in recent years. In the past, it was not uncommon for the price of Bitcoin to experience daily fluctuations of 5% or 10% within a single day, followed by a reversal on the next trading day.

Traditional financial institutions are gradually dominating the Bitcoin market.

The stability of Bitcoin complements the growing influence of institutional investors, whether it is corporate capital like the Bitcoin reserve strategy pioneer MicroStrategy( or through the U.S. Bitcoin ETF, as more and more funds from TradFi continue to increase, beginning to change the Bitcoin trading market.

Michael Longoria, a research analyst at cryptocurrency investment firm GSR, stated:

This transformation helps to curb extreme market conditions and adds a layer of price discipline.

Arca's Chief Investment Officer Jeff Dorman also believes that Bitcoin's annual pump may become smaller, turning it into a boring stock, but it will also become a more attractive retirement asset.

)Why is Bitcoin not pumping? Whales sold 500,000 BTC in a year, and the annual increase of Bitcoin will gradually shrink(

This article discusses Bitcoin's volatility dropping to a two-year low, with TradFi entering the market making BTC prices more stable? Originally appeared on on-chain news ABMedia.

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