Bitcoin Volatility Hits Lowest Level Since Cycle Low, Traders Shift to AI Stocks and Prediction Markets

BlockBeats News, August 19th. Bitcoin's recent volatility has dropped to a multi-year low, with a 30-day actual volatility of around 42%, compared to the S&P 500 index at around 18%, resulting in the smallest historical difference in volatility between the two. The market is at a stalemate between buyers and sellers, with corporations and mining firms selling to limit upside potential, while deleveraging and continuous accumulation by long-term holders are limiting the downside.

As Bitcoin's volatility decreases, some short-term traders are starting to shift their risk appetite towards assets such as AI stocks, tokenized stocks, stock perpetual swaps, and prediction markets. According to NYDIG research, short-term traders are more inclined to chase volatility, narrative momentum, and potential returns, and "traders seeking 5x or 10x returns" can now choose between Bitcoin, Nvidia, gold, stock perpetual swaps, 0DTE options, and sports event contracts.

Data shows that the monthly trading volume of traditional asset perpetual swaps on crypto exchanges has increased from $52 billion in January to $268 billion in June, a growth of over 5 times in six months. At the same time, retail traders in South Korea have notably shifted from cryptocurrencies to AI-related stocks, with trading volumes on major Korean crypto exchanges seeing a year-on-year decrease of around 80%.

CoinDesk points out that the Bitcoin market currently resembles more of a "dormant" state, with reduced trading participation, shrinking market depth, and regulatory uncertainty collectively suppressing volatility. If there is substantive progress in U.S. crypto regulation, a macroeconomic shift, or the emergence of a new market narrative, the current low volatility regime could be disrupted, potentially leading to increased price fluctuations due to thinner liquidity or further amplified.