Recent research indicates that Bitcoin is becoming a less risky asset as its capitalization and liquidity grow. This article explores changes in Bitcoin's volatility and increasing institutional investments.
Bitcoin Risk Compression
According to Anthony Pompliano, Bitcoin is demonstrating risk compression as its market cap increases and liquidity deepens. He stated, "If you can’t beat Bitcoin, you have to buy it."
Pompliano reported that his company ProCap BTC already holds 4,900 BTC with plans to scale to a billion-dollar treasury.
Data on Risk Reduction
Data from recent years reveals a clear decline in Bitcoin's volatility. In 2020, its 30-day volatility was 71%, while in 2023 it dropped to 43%, and by mid-2025 it is anticipated to reach 25%.
The Sharpe ratio, which assesses return relative to risk, has also increased, reaching 2.1 over five years compared to Nasdaq's 1.3. Institutional players like BlackRock are accumulating Bitcoin, significantly impacting price stability.
The Future of Bitcoin in Investment Markets
Pompliano argues that deeper liquidity changes the rules, allowing larger investors to exit the market without negative price impacts. This encourages further capital inflow and reduces perceived risk.
Price forecasts for Bitcoin vary as well. For instance, Matrixport predicts that by the end of July 2025, the price could reach $116,000, indicating continued investor optimism about stable growth.
With increasing capitalization and improving liquidity, Bitcoin is changing its perception from a high-risk asset to a strategic investment component. The influence of major institutional investors and decreasing volatility suggests that Bitcoin is increasingly seen not just as a speculative asset but as a strategic element of investment portfolios.
