Key Points
- Bitcoin’s three- and six-month rolling volatility has reached historic lows. Corporate treasuries now hold over 6% of Bitcoin’s total supply.
- This corporate buying is likened to “private sector quantitative easing.”
- The reduced volatility makes Bitcoin a more attractive investment, potentially rivaling gold as an investment option.
- Recent regulatory changes and successful corporate strategies have fueled this trend.
Bitcoin’s price swings, once notoriously volatile, have significantly calmed this year. JPMorgan strategists attribute this dramatic decrease in volatility to a surge in corporate bitcoin accumulation. The cryptocurrency’s three- and six-month rolling volatility has plummeted to historically low levels. This trend has persisted even as Bitcoin hit new record highs this year.
While Bitcoin experienced minor fluctuations recently, trading around $109,000 after a brief dip, its year-to-date performance remains positive, exceeding 17%.
This unexpected stability is linked to the increasing adoption of Bitcoin by corporations. JPMorgan’s Nikolaos Panigirtzoglou notes that corporate treasuries now hold over 6% of Bitcoin’s total supply, effectively creating a form of “private sector quantitative easing” for the crypto market.
This massive corporate buying spree is seen as a key driver behind the reduced volatility, making Bitcoin a less risky investment proposition.
The trend began with Michael Saylor’s MicroStrategy, which pioneered the strategy of accumulating Bitcoin as a corporate asset. This initiative, combined with less stringent accounting regulations and more favorable government treatment under the Trump administration, spurred other companies to follow suit.
From Trump Media & Technology Group to GameStop and numerous others, companies have invested tens of billions of dollars in Bitcoin since the start of the year. This wave of corporate investment has been particularly strong, with public companies acquiring nearly two-thirds of total Bitcoin purchases in July alone.
The impact of this corporate buying extends beyond reduced volatility. JPMorgan suggests that this increased stability could make Bitcoin more attractive to investors, potentially positioning it as a viable competitor to gold.
Further contributing factors include the introduction of Bitcoin-related financial products, such as futures contracts and ETFs, which broaden investor participation and diversify holdings. While the sustainability of this trend remains a topic of debate, the current phenomenon clearly demonstrates a significant shift in Bitcoin’s market dynamics and potential long-term implications.
The recent announcements of new crypto treasury companies, such as Trump Media Group CRO Strategy, highlight the expanding interest within this emerging corporate investment landscape.
