As Bitcoin adoption has increased, its volatility, as measured by its percentage price change from a year ago (measured weekly), has decreased by about 22 times over the past 7 years.

The same thing happened with amazon as adoption of its revolutionary retail/marketplace model gained adoption and changed the world. Sure, it took decades, but look at it now.

Well, Bitcoin is doing it faster and better.

The chart axis is logarithmic so Bitcoin volatility can be viewed. The 2013 Bitcoin cycle is not included because FRED’s Coinbase data does not reach back that far.

For comparison, the blue line is the annual percentage change in the yield (measured weekly) on the 10 year US Treasury.

But wait! Treasury yields, even the risk-free rate, can also be volatile? WTF?

In fact, when the Fed increased the FFR between 2022 and 2024, which in turn fed into the bond market (look at the blue line during that period) trillions of investment dollars were lost holding the so-called risk-free long bond—i.e., Treasuries with maturities of 10 years plus. The move up from almost 0% to 5% interest rates created the worst fixed income (bond) returns in over 100 years.

Conversely, Bitcoin shows the best returns of any investment asset, ever, despite the large, but decreasing, amplitudes.

But as Bitcoin adoption increases, the amplitudes will compress even further.

We can already see some major compression in this current Bitcoin cycle (over 20x) and by the end of the next Bitcoin cycle, potentially 2030, we’ll no longer need to use a log scale to measure the amplitude.

Something worth considering for your Treasury, no?

Maybe keep this in mind as we watch the Trump administration focus on government debt, gold (in and out of Fort Knox) and Bitcoin in the coming months.

See you in the market.

Mike

7 years on, Bitcoin price 22 times less volatile