Bitcoin’s Calm Rally Hints at New Era of Wall Street-Like Stability
11/7/2025
Bitcoin’s current bull run is rewriting the narrative around crypto markets. Instead of the turbulent spikes that once defined it, BTC is now rising steadily, echoing the measured advances typical of traditional financial assets.
A Shift From Wild Volatility
In past years, bitcoin’s surges were synonymous with frantic volatility, sleepless traders, and sudden liquidation cascades. But this time, the rally has been remarkably controlled.
Since November 2024, bitcoin has climbed from around $70,000 to over $118,000—a 68% gain. But unlike earlier cycles, this run has come with declining volatility. The usual pattern where prices and volatility rise in tandem has broken down.
This mirrors Wall Street, where the VIX index—the so-called “fear gauge”—tends to drop during bull markets.
Cole Kennelly, founder and CEO of Volmex Labs, told CoinDesk:
“Bitcoin’s spot prices and the BVIV Index may now be showing a negative correlation, much like how the VIX behaves in traditional markets. It’s a sign of crypto’s growing maturity.”
Institutional Flows Rewrite Market Dynamics
A major reason for this shift is institutional adoption. The long-standing positive correlation between bitcoin’s price and volatility appears to be fading as larger players enter the market.
In late 2024, the BVIV Index—which tracks 30-day implied volatility for bitcoin options—held steady between 60% and 70% while bitcoin rose from $70,000 to $100,000. Since January, BVIV has been trending lower, now sitting near 40%, its lowest level since October 2023.
Earlier rallies were different. For instance, bitcoin’s jump from $43,000 to $73,000 in early 2024 saw volatility spike from 43% to 85%.
A similar decoupling has occurred in Deribit’s DVOL index. Pulkit Goyal, Head of Trading at Orbit Markets, explained:
“This rally is different. Unlike past parabolic surges driven by retail speculation, this move has been steady and institution-led. So while bitcoin’s spot price has risen, realized volatility hasn’t increased the same way, keeping implied volatility suppressed.”
Data from TradingView shows bitcoin’s 30-day realized volatility falling from 85% in early 2024 to about 28% recently—far below levels seen during previous bull markets.
Why Volatility is Lower
Greg Magadini, Director of Derivatives at Amberdata, points to institutional strategies like writing covered calls on bitcoin holdings or bitcoin-linked ETFs such as BlackRock’s IBIT.
“Two main factors are driving lower volatility: bitcoin’s growth into a large, liquid asset and the increased use of options trading by institutional players over the past six months,” Magadini said.
When institutions sell out-of-the-money call options against their bitcoin holdings, they help keep implied volatility lower while generating yield—a tactic that has become increasingly common.
Kennelly added:
“This changing spot-vol relationship is fueled by structural volatility sellers, including bitcoin treasury vehicles, which have become more prominent.”
Market makers and dealers also contribute. As miners and institutions sell covered calls, dealers are left with long vega exposure, meaning they profit if volatility rises. To stay neutral, they hedge by selling volatility, keeping implied volatility lower even as bitcoin prices climb.
Goyal elaborated:
“Miners and long-term holders often sell covered calls for extra yield. Dealers pick these up, accumulating long vega risk. As prices rise, they hedge by selling volatility, which can suppress or even invert the usual spot-volatility correlation.”
Calm… For Now
Bitcoin’s steady climb and subdued volatility may persist if macroeconomic factors remain supportive, like a weakening U.S. dollar and potential rate cuts. But traders caution that an unexpected shock could still jolt volatility higher.
Philip Gillespie, managing partner at AWR Capital, summed it up:
“The macro backdrop supports risk assets right now, with the dollar weakening and asset prices climbing. Small dips get quickly bought, which keeps volatility low as bitcoin approaches record highs. But any sudden shock could cause volatility to spike.”
For now, bitcoin’s market resembles a steady train ride rather than a roller coaster, driven more by institutional flows and macro trends than retail frenzy—a stark shift from its earlier Wild West days.
