Bitcoin Volatility Jumps to 6-Month High Amid ’Unusually High’ Macro Uncertainty

Bitcoin’s price has been fluctuating more than it has since last summer, the shifts spurred largely by worries about the U.S. economy, Donald Trump’s erratic trade moves and other macroeconomic uncertainties. 

The top cryptocurrency’s 30-day volatility, which tracks the standard deviation of daily returns over the past month, hit 3.6% on Wednesday, according to the crypto data provider CoinGlass.

That level is the highest since August, up from 1.6% four weeks ago, although it is below last year’s peak of 4.3%. In the short-term, analysts say that erratic price action is likely to persist amid a murky macro outlook, Greg Magadini, director of derivatives at the crypto data provider Amberdata, told Decrypt.

“We are currently in a high-volatility environment that will likely continue until the impact that tariffs have on inflation and interest rates are more widely known,” he added. “Crypto has experienced higher volatility alongside all risk assets.”

Indeed, the CBOE Volatility Index (VIX), a gauge for market fear on Wall Street, almost touched 30 this month, its highest level since August, according to Yahoo Finance. Meanwhile, the S&P 500 has completely relinquished its post-election gains.

Bitcoin’s price at about $83,900 has dropped 10% over the past month and more than 20% off its record high above $108,000, set in January, according to the crypto data provider CoinGecko.

Although Bitcoin’s volatility may trend lower as the asset matures long-term, the asset’s high correlation with stocks is making prices choppy for the time being, Magadini said.

The uptick in Bitcoin’s volatility has coincided with the U.S. central bank’s decision on Wednesday to hold interest rates steady, with Fed Chair Jerome Powell acknowledging “unusually high” macro uncertainty in the U.S. 

Powell downplayed recession concerns, but he said “further progress” on the Fed’s inflation fight “may be delayed” due to Trump’s tariffs. That could translate into higher rates for longer.

“Bitcoin has been swept up in broader macro uncertainty,” Zach Pandl, head of research at the crypto asset manager Grayscale, told Decrypt. “Although tariffs do not directly affect Bitcoin, higher policy uncertainty has caused investors to reduce portfolio risk across the board.”

Bitcoin’s price boomed last year as the Fed made a series of rate cuts, lowering its benchmark rate by a full percentage point. Typically, lower rates benefit risk assets through increased liquidity and cheaper borrowing costs, as safer bets like U.S. Treasuries grow less attractive.

As an alternative monetary system competing with the U.S. dollar, Pandl noted that nothing has changed about Bitcoin’s fundamental outlook. Grayscale’s research team views the recent pullback as a compelling entry point for investors not currently allocated, he added.

Edited by James Rubin