Bitcoin (BTC) Monthly Volatility ‘Was Not Significant in Historical Context,’ ARK Invest Says

Bitcoin’s (BTC) price experienced sharp fluctuations in December after failing to hold above $100,000, but according to ARK Invest, the cryptocurrency’s movements weren’t out of the ordinary.

Bitcoin’s BTC price experienced sharp fluctuations in December after failing to hold above $100,000, but according to ARK Invest, the cryptocurrency’s movements weren’t out of the ordinary.

ARK Invest’s “The Bitcoin Monthly” report for December compared BTC’s monthly and yearly realized volatility — a measure of how sharply an asset’s price fluctuates over a specific period. Although Bitcoin concluded Q4 with a spike in volatility, it “was not significant in historical context,” the report said.

In an accompanying chart, ARK showed that Bitcoin’s monthly volatility in December was relatively low compared to its yearly volatility.

Bitcoin’s monthly volatility (green line) was relatively tame compared to its annual volatility (purple line) in the fourth quarter. Source: ARK Low relative volatility implies that Bitcoin hasn’t yet reached the mania phase of its cycle, which means further upward momentum is likely, especially in a bull market.

“Indeed, these data points suggest room for further market expansion during 2025,” ARK's report said.

The report cited several other bullish indicators for Bitcoin in December, including mining difficulty, holder behavior and the short-term holder cost basis.

On the topic of strong holder behavior, ARK's data showed that 62% of Bitcoin’s supply hasn't moved in more than a year, even as the asset recorded gains of more than 100% in 2024.

Anticipation builds ahead of Trump’s inauguration

Bitcoin’s price blasted through $100,000 in December after the election of Donald Trump, who promised to usher in a new era in crypto for the US.

During his presidential campaign, Trump vowed to make America the Bitcoin and crypto capital of the world.

Ahead of his inauguration, the president-elect selected pro-crypto Paul Atkins to head the critical Securities and Exchange Commission. A few days later, he appointed David Sacks as his top crypto and AI adviser. The crypto community largely supported the moves.

Pantera Capital expects Trump's presidency to further legitimize Bitcoin and crypto, driving prices to new all-time highs in the coming months.

According to a report by The Washington Post, Trump is expected to sign crypto-specific executive orders once he takes office on Jan. 20. These “day-one” executive orders are supposed to further clarify crypto’s priority for the upcoming administration.