Bitcoin’s volatility hit an all-time low this week, and while the lull in price action over the past few months has been welcome, investors may not want it to last forever. Volatility has always been a key feature of cryptocurrency. Lately, some investors have taken comfort in seeing bitcoin become less responsive to volatile macroeconomic events, especially since the stock market is highly sensitive to them. Moreover, apart from the initial dip when the saga first started after the FTX explosion, bitcoin has been relatively stable. This may seem like a good thing for long-term investors and prospective investors. After all, some traders have learned to use bitcoin’s volatility to their advantage. But according to Fidelity Digital Assets’ most recent survey of institutional investors in October, half said price volatility was actually the biggest obstacle to investing. According to Noelle Acheson, economist and author of the Crypto is Macro Now newsletter, low volatility is both a sign and a reason why traders stay out of the market. “This is not great for bitcoin’s outlook, as traders make the market more liquid and livelier, making the bulk of on-chain movements as well as off-chain exchange movements,” he said. “The increase in Bitcoin volatility will be viewed as a positive sign rather than a cause for concern, and will likely be closely followed by similar movement in spot and derivative trading volumes.” Matthew Siegel, VanEck’s head of digital asset research, said the decline in volatility was “unsustainable” and would reverse. He attributed the change to a significant reduction in leverage in the market and low volumes that prevented investors from making large directional bets. Open interest in futures contracts, a measure of current leverage in the cryptocurrency market, is the lowest since early 2021, according to Coin Metrics. Siegel also pointed to bitcoin miners who could sell covered calls to cash in on profits. as much as they can. Bitcoin miners have had a hard time with the price of bitcoin staying so low. It fluctuated around $16,000 this week. With the market so depressed, the cost of mining one bitcoin can be higher than the price of bitcoin, which rewards miners for their contributions to the network. For miners, it is sometimes necessary to sell their bitcoins (by selling them at what they consider to be an overvalued price) to cover mining costs or to make more profit. The volatility dynamic is exacerbated by miners trying to avoid it, Sigel said. A drop in volatility is not necessarily a sign that an asset class is maturing. But according to Siegel, a turnaround may be on the horizon. “Every time volatility has been this low historically, bitcoin prices have fallen,” said Alex Thorn, head of large-scale research at Galaxy Digital. Thorn said the crypto market will emerge from this period significantly matured, though he sees the collapse of lenders and stock markets as volatile. For now, the conditions are stagnant. “The flow is down, we’ve talked to clients who are now trading gold instead of crypto,” Thorn said, adding a note of optimism. “It’s cyclical, it will come back,” he said. “We saw some big investors who did their homework and felt they were kind of missing out on the big race. They ended up getting in and out because they were doomed for the long haul.” Tim Rice, co-founder and CEO of cryptocurrency market data provider Coin Metrics, said the current low volatility is good for the industry as it gives skeptical investors an “interesting” entry point. It also shows that there are no major trends in one direction or the other. Some crypto investors embrace bear markets, known by many as “crypto winters,” and think of them as episodes that blow the bubble out of the market and set the stage for the next catalyst they hope will drive the next rally. For now, however, any potential innovation within the industry is overshadowed by the Federal Reserve’s abortive campaign to raise interest rates. “The risk in general is to just sit back and wait for monetary policy,” Thorn said. “There are many reasons and there will be many catalysts to leave. [from stocks] could happen, but really everyone is sitting on their hands trying to figure out where this is going,” Thorn added.