Bitcoin Whale Explains to Bloomberg Why Crypto Volatility Will Fall

Bitcoin’s wild price swings may be a thing of the past as more powerful institutional buyers continue to push the cryptocurrency higher, according to a prominent cryptocurrency whale.

Eric Peters, founder and CEO of One River Asset Management, told Bloomberg on Thursday that Bitcoin’s maturation will help stabilize its price.

“There are all kinds of reflexive dynamics with these assets, and the irony is that the higher the price of bitcoin goes, the less volatile it becomes,” he said. “As the price goes up, you’re attracting new types of investors with more power.”

One River Asset Management has bought more than $600 million worth of Bitcoin. The asset management company expects to own about $1 billion worth of Bitcoin and Ethereum by the first half of this year.

Volatility has been a core feature of Bitcoin since its creation in 2009, but the magnitude of Bitcoin price fluctuations has been greatly reduced over the years. With the exception of the liquidity crisis in March 2020, Bitcoin's daily volatility has not exceeded 10% since 2013. According to Bitpremier data, Bitcoin's daily volatility has only exceeded 7% a few times since 2016.

Bitcoin’s daily price fluctuations. Source: Bitpremier

Peters believes that institutional buyers will play an increasingly important role in helping Bitcoin mature and avoid the huge price swings seen in the past.

He told Bloomberg:

“It’s being discussed at nearly every large, reputable institution in the United States.”

US financial institution Goldman Sachs, which has been highly critical of Bitcoin in the past, now even admits that the digital asset is beginning to mature. However, long-term stability will depend on greater institutional adoption.

Jeff Currie, global head of commodities research at Goldman Sachs, recently told CNBC that Bitcoin still needs to attract savvy investors to help stabilize the market.

Guggenheim Chief Investment Officer Scott Minerd said that in the short term, institutional adoption does not seem to be enough to push the price of Bitcoin above $30,000. Although his short-term outlook seems bearish, Minerd still believes that Bitcoin is a viable asset in the long run.

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