Bitcoin's volatility has dropped dramatically over the past several years, falling from around 120 in 2017 to nearly 35 in 2026, according to long-time Bitcoin investor and Mayer Multiple creator Trace Mayer. While some market participants see the decline as a sign that Bitcoin is losing its appeal, Mayer argues the opposite: lower volatility reflects the cryptocurrency's growing maturity and institutional acceptance.
Institutional Investors Changing the Market
Mayer believes Bitcoin's reduced price swings are a direct result of increasing participation from corporations, family offices, ETFs, and institutional investors.
According to him, Bitcoin has evolved from a relatively small speculative market into a massive financial asset that is much harder to move sharply. He compared the transformation to increasing the weight on a barbell from 50 pounds to 2,500 pounds, making sudden movements far less likely.
Options Markets Helping Stabilize Prices
A major factor behind this shift is the expansion of Bitcoin's options market.
Mayer explained that institutions often sell covered call options on their Bitcoin holdings to generate income. Market makers that buy these options must hedge their exposure by selling Bitcoin as prices rise, creating a natural resistance to sharp upward movements.
This process, known as negative delta hedging, can reduce volatility and contribute to a more stable trading environment.
Mayer Multiple Signals Bitcoin Near Long-Term Trend
Mayer also highlighted his well-known Mayer Multiple, which measures Bitcoin's current price relative to its 200-day moving average.
Historically:
Readings above 2.4 have often signaled market tops.
Readings below 0.8 have typically represented attractive buying opportunities.
Bitcoin is currently trading at a Mayer Multiple of approximately 0.94, indicating it is close to its long-term average trend.
Mayer noted that standard deviation bands around Bitcoin's price have narrowed significantly over time, suggesting the asset is becoming more mature and less prone to extreme boom-and-bust cycles.
Lower Volatility Could Attract More Capital
According to Mayer, reduced volatility is actually beneficial for Bitcoin's long-term growth because it makes the asset more suitable for institutional portfolios and corporate treasuries.
He compared Bitcoin's evolution to gold, noting that large investors generally prefer stable assets that can be evaluated and managed within traditional risk frameworks.
As Bitcoin becomes more predictable, it may become easier for investment committees and large financial institutions to allocate capital to the asset.
Long-Term Risks Remain
Despite his bullish outlook, Mayer acknowledged several long-term risks:
Declining miner profitability could weaken Bitcoin's network security.
Advances in quantum computing may eventually threaten existing cryptographic systems.
Regulatory developments could continue to influence market dynamics.
However, he believes Bitcoin's fixed supply remains its strongest advantage.
Bitcoin vs Gold
Mayer remains optimistic about Bitcoin's prospects relative to gold over the next 15 years. Unlike gold, whose supply can increase when prices rise and new mining opportunities emerge, Bitcoin's supply is permanently capped at 21 million coins.
He also pointed to future technological developments—such as asteroid mining or advanced resource extraction—that could potentially increase gold supply, while Bitcoin's scarcity remains unchanged.
Key Takeaway
Trace Mayer views Bitcoin's declining volatility not as a weakness but as evidence that the cryptocurrency is evolving into a mainstream reserve asset. Growing institutional participation, expanding derivatives markets, and a fixed supply cap continue to strengthen the long-term investment case for Bitcoin, even as the asset becomes less volatile than in its early years.
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