FameEX Hot Topics | Bitcoin's Low Volatility Points to Potential Upside in 2025

Bitcoin experienced significant price fluctuations in December 2024 after failing to maintain levels above $100,000. However, ARK Invest's The Bitcoin Monthly report indicated that these movements were not out of the ordinary when viewed within a historical context. The report analyzed Bitcoin’s monthly and yearly realized volatility, concluding that the end-of-year volatility spike was moderate compared to past trends.

According to ARK, Bitcoin's low relative volatility suggests it has not yet entered the "mania phase" of its market cycle, leaving room for further growth. The report noted, “These data points suggest room for further market expansion during 2025,” reinforcing a bullish outlook for the cryptocurrency in the months ahead. Key metrics, including mining difficulty, strong holder behavior, and the short-term holder cost basis, supported this positive sentiment.

Holder behavior emerged as a particularly bullish signal. ARK’s analysis revealed that 62% of Bitcoin’s total supply had not moved in over a year, even as Bitcoin posted gains of more than 100% in 2024. This data indicates strong confidence among long-term holders, bolstering Bitcoin's potential for sustained growth in the upcoming year.

Bitcoin’s surge past $100,000 in December coincided with the election of Donald Trump, who has vowed to make the United States a global hub for Bitcoin and cryptocurrencies. As part of his pro-crypto agenda, Trump appointed Paul Atkins to lead the Securities and Exchange Commission and David Sacks as his chief adviser on crypto and AI. These moves were widely applauded by the cryptocurrency community, signaling a favorable policy environment under the new administration.

Further excitement stems from expectations that Trump will issue crypto-specific executive orders on his first day in office on January 20. The Washington Post reported that these “day-one” actions aim to prioritize cryptocurrency initiatives, reinforcing the sector’s importance in the U.S. economy. Pantera Capital projects that these developments could further legitimize Bitcoin, driving its price to unprecedented all-time highs in the near future.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.