Bitcoin Brief: New Highs, Slower Trajectory
Key Developments
- Bitcoin surged to a new all-time high (ATH) of $118,667 on Friday, marking an increase of nearly $7,000 (+~25%) since the start of 2025.
- Despite recent gains, Bitcoin’s potential pace of ascent may be slower than in previous bull markets, influenced partly by the expanding options market.
- Bitcoin ETFs (exchange-traded funds) experienced significant inflows, recording over $1 billion in net assets added on both Thursday and Friday.
Lower Volatility Indicates a Maturing Market
Bitcoin may be setting new records, but its path upwards could be more moderate and sustainable than in past cycles, according to experts.
Volatility has diminished, with experts suggesting Bitcoin’s growth as a more established asset class is dampening large, rapid price swings.
“Think of it like someone who’s working out—a massive spike higher is like someone crash dieting to hit their weight goal, and then they just lose it three weeks later,” said Greg Magadini, director of derivatives at Amberdata. Conversely, a steady approach is sustainable, requiring significantly more capital to move the larger market.
Historical Comparison
Contrast this with Bitcoin’s meteoric rise in early 2017, where it started the year at approximately $786 but surged over 2,360% to reach record highs around $19,345 by December.
Current volatility levels (realized volatility at 29.5%) are significantly down from the peak seen during the bull run of 2021 (100% volatility).
Institutional Influence & Options Markets
The increasing sophistication of the Bitcoin market is cited as a key factor in the reduced volatility.
The derivatives market, particularly options, has swollen dramatically. While options peaked at under $15 billion in 2021, prices surged to over $42.5 billion on May revenue.
New investors, primarily institutional capital flowing through Bitcoin ETFs, are employing sophisticated trading strategies. This includes selling call options, adding liquidity and implicitly capping higher upside potential faster. Market maker involvement, facilitated by large ETF providers like BlackRock, further underpins this structure.
Continued Expert Caution
Despite the shift towards a potentially steadier climb, analysts caution that dramatic price swings are unlikely to disappear entirely.
David Lawant, research head at FalconX, stated: “I would definitely not rule out periods of high volatility… price surges from now might be locked into a tighter time period.”
Bitcoin Price Data
- ATH: $118,667
- Price increased from ~$93,500 at the start of 2025 (a ~25% rise)
- Current Realized Volatility: 29.5%
- Historical High Volatility (Jan 2021): 100%
Bitcoin Brief: Record Climb?
The Jump
- Bitcoin hit an all-time high of $118,667 on Friday, a nearly $7,000 increase over the week.
- The record is also about 25% higher than its price at the start of 2025 (~$93,500).
- Meanwhile, Bitcoin Exchange-Traded Funds reached new heights in popularity, with over $1 billion in inflows occurring on both Thursday and Friday.
Lower Volatility = Different Dynamic
Bitcoin’s climb, despite reaching new peaks, may lack the explosive pace seen in previous bull runs, analysts suggest. This change points to a maturing market.
Why the Potential Slower Pace?
Volatility has decreased, experts told Decrypt. As more sophisticated players use options and ETFs to trade Bitcoin, they anticipate moves more slowly and set expectations accordingly.
“Think of it like someone who’s working out—a massive spike higher is like someone crash dieting… a slow and steady grind is sustainable,” explained Greg Magadini.
Market Evolution Explained
The influx of institutional capital via ETFs and the expansion of the options market create a different playing field.
Large ETF issuers (i.e., BlackRock) bring significant market makers who utilize sophisticated tools like selling call options to manage volatility and liquidity, unlike the smaller ecosystem in earlier cycles.
The asset is attracting an older, more institutional investor base primarily because of these new investment channels.
A Look at Inflows
Data on asset flows underscores the institutional interest: Bitcoin spot ETFs saw $1.17 billion worth of inflows the week prior to Friday’s peak, ranking near their beginning.
Historical Recall
Last time Bitcoin set record highs was five years prior, reaching approximately $19,345—an astronomical ~2,360% gain from early 2017 starting prices. Today’s market cap growth requires substantially more capital to effect significant price changes.
And Further Commentary…
While volatility isn’t back to previous levels, periods of sharp movement aren’t ruled out.
Research head David Lawant posits: “…price surges from now might ‘be locked into a tighter time period,’ but the overall scenario seems focused on sustainability over velocity.”
Bitcoin Market Insights
The expanding derivatives market (cryptocurrency options), particularly notable with high open interest figures on platforms like Deribit, highlights increased institutional sophistication.
