Bitcoin volatility eases as Fed policy remains key risk

Bitcoin traded around $64,085 on Thursday as peak daily volatility for the cryptocurrency dropped to 2.24% in 2025, CoinShares reported. The firm identified Federal Reserve policy as the largest factor influencing near-term price moves, alongside geopolitical tensions in the Middle East.

CoinShares linked the calmer trading to deeper institutional participation, while noting that hawkish signals from the Fed and shifts in dollar liquidity continue to affect market dynamics. The firm highlighted the June Federal Open Market Committee minutes, which kept the benchmark rate at 3.50% to 3.75% and removed language that had suggested a leaning toward rate cuts. James Butterfill, head of research at CoinShares, said the minutes carried extra weight because Fed Chair Kevin Warsh has not provided a clear public view on the path for rates.

The firm’s analysis shows a long-term decline in bitcoin’s short-term swings: peak daily volatility fell from 7.58% in 2013 to 2.24% in 2025. Annualized volatility has also come down from levels that frequently exceeded 150% before the launch of spot bitcoin ETFs, CoinShares’ data indicate.

Spot bitcoin ETFs recorded roughly $8 billion in outflows over an eight-week stretch, the longest consecutive withdrawals on record, the firm reported. Recent buying over the past few trading days suggests forced selling may be easing, a pattern CoinShares notes is often an early sign of a market bottom.

CoinShares pointed to several factors still shaping bitcoin’s price moves: sensitivity to Fed policy and dollar liquidity, regulatory developments that trigger event-driven moves, and leverage in crypto derivatives markets that can amplify price swings.

The firm’s portfolio modeling found that a traditional 60/40 stock-bond portfolio returned 8.56% annually from January 2020 through March 2026. A version with a 5% allocation to bitcoin returned 11.64% annually over the same period, and the Sharpe ratio rose from 0.71 to 0.93 with the bitcoin allocation, CoinShares reported.

For investors tracking short-term expectations, CoinShares pointed to the CME CF Bitcoin Volatility Index, which uses options pricing to estimate expected price swings over the next 30 days. For exposure without holding bitcoin directly, CoinShares’ Bitcoin ETF (BRRR) carries a 0.25% expense ratio and has amassed about $366.1 million in assets since its January 2024 launch.

CoinShares plans an educational webinar on July 14 at 12:30 p.m. ET to discuss opportunities in bitcoin equities and how investors can capture demand related to artificial intelligence infrastructure. The firm also maintains a crypto ETF hub with further information on strategy and products.