The report said that regulatory clarity, wider adoption, and long-term investment behaviors are stabilizing Bitcoin’s performance.
Deutsche Bank said in a research report on Tuesday that Bitcoin’s (BTC) volatility could continue to fall as mainstream acceptance grows, and companies, retail investors, and governments adopt the cryptocurrency.
Excitement over upcoming U.S. legislation spurred Bitcoin’s recent rally, the German lender said. However, the crypto’s rise also saw a historic decline in volatility levels.
The report stated that Bitcoin, the world’s largest cryptocurrency, has surged almost 75% since mid-November. This rise was mainly due to positive regulations, increased institutional acceptance, and broader economic changes worldwide.
The rally coincides with “Crypto Week” in Washington, DC, highlighting increasing government and corporate engagement with digital assets. This week, the House of Representatives will vote on the CLARITY Act, a crypto market structure bill, and the GENIUS Act, which regulates stablecoins in the U.S.
Deutsche Bank suggests the drop in volatility signals a maturing market where regulatory clarity, broader adoption, and long-term investment behaviors are stabilizing performance.
As bitcoin gains legitimacy through regulation and integration into traditional portfolios, its speculative image may continue to be shed, allowing it to evolve into a more stable, strategic asset, the report added.
As volatility decreases and regulatory certainty increases, consequently, bitcoin appeals more to pension funds, sovereign wealth funds, and other long-term allocators.