Bitcoin’s annualized volatility has fallen to around 45% from more than 100% in its early years, reflecting greater institutional participation and market maturity. This does not mean that Bitcoin has become a low-risk asset, as it can still experience sudden and rapid declines. The shift has been driven by clearer regulation, more secure investment vehicles such as ETFs, and the involvement of institutions including BlackRock, Grayscale, Strategy, and Morgan Stanley. Crypto sectors are also becoming less dependent on Bitcoin: it accounts for 38% of volatility in smart contract platforms, 35% in artificial intelligence, and 30% in decentralized finance, while 45 of the 100 largest crypto assets have outperformed Bitcoin over the past 90 days.
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