Bitcoin's annualized volatility has declined to about 38%, down from nearly 200% more than a decade ago, making its swings comparable to major blue‑chip stocks. Wall Street buy‑and‑hold investors are increasing Bitcoin allocations, reducing short-term trading opportunities. Speculative traders are shifting toward Ethereum, where ETF volumes have on several days matched or surpassed Bitcoin ETF volumes amid corporate buying. BlackRock's Ether ETF, launched in April, already accounts for sizable open options positions. Both Bitcoin and Ether rose after a Fed signal that a September rate cut is possible. Market dynamics reflect rotation: Bitcoin as long-term hold, Ethereum as a trader’s asset.
Bitcoin, once the unruly child of finance, is showing signs of maturity as its wild swings fade, forcing speculative traders to hunt for a new playground. The world's biggest cryptocurrency is behaving more like a blue-chip stock as Wall Street's buy-and-hold investors plunge in. Annualized volatility has dropped to a once-unthinkable 38% from close to 200% more than a decade ago. It is now comparable to the likes of Starbucks Corp. or Goldman Sachs Group Inc., according to Bytetree Asset Management.
Investors chasing price swings are instead turning to rival Ethereum, the second-largest virtual currency. On several trading days this month, Ether exchange-traded fund volumes have matched or surpassed their Bitcoin counterparts on the heels of a corporate-buying frenzy. Both currencies rose Friday after Federal Reserve Chair Jerome Powell opened the door to an interest-rate cut in September at the central bank's Jackson Hole Symposium.
BlackRock's Ether ETF launched only in April, already accounts for $5.5 billion in open options positions, roughly 40% the amount for Ether on the crypto-derivatives platform Deribit. The setup reflects a familiar rotation. Bitcoin is increasingly seen as a long-term hold. Ethereum, still earlier in its institutional uptake, has become the go-to asset for traders seeking sharper swings.
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