Deutsche Bank Report: Bitcoin’s Volatility Is Cooling Off – Here’s Why It Matters

Bitcoin's wild price swings might finally be settling down—and Deutsche Bank thinks institutional adoption is the key driver.

Why the shift? Big money's playing now.

Once dismissed as a casino for crypto bros, Bitcoin's seeing pension funds and hedge funds quietly building positions. The result? Less dramatic 20% daily drops—and fewer traders crying into their leverage.

But don't break out the 'stablecoin' memes yet. This is still Bitcoin—where 'maturity' means only swinging 5% before lunch.

As one analyst quipped: 'It's progress... assuming you ignore that time last quarter when a single Elon Musk tweet moved markets more than the Fed.'

According to Deutsche Bank analyst Marion Laboure, the lower volatility is an extremely bullish sign for Bitcoin. “While excitement over the upcoming legislation has spurred Bitcoin’s sharp appreciation, it is notable that Bitcoin’s rise has also been accompanied by a historic decline in volatility levels,” Laboure wrote to clients in a Tuesday note. “This combination suggests we are potentially starting to witness a gradual decoupling between Bitcoin’s spot prices and volatility,” she added.

The $1.5 trillion asset manager has already announced that it will provide cryptocurrency custodial services as early as 2026. The crypto industry has grown at a rapid pace in the last few years, in part thanks to Bitcoin’s rally. In just one year, BTC is up over 85%. Its recent ATH surge came as the US House of Representatives is discussing several crypto policies this week. These include the Genius Act, among others, that would ease restrictions and legislation on the growing industry.

Abroad, Bitcoin and crypto are also gaining ground and popularity. Germany and the UK have been weighing crypto legislation, and in South America, countries like Guatemala are favoring the digital asset industry. Several tech companies have also increased their investments in Bitcoin and cryptocurrency, sending those prices upward as well. As institutional interest has risen, the crypto market has leveled out to new higher prices, with BTC establishing a clear level aroun $110,000-$120,000. Furthermore, Deutsche bank suggests that this trend could lead Bitcoin to evolve into a more stable and strategic asset, potentially increasing its appeal to institutional investors.

Currently, analysts are eying $150,000 as the next milestone for bitcoin BTC. A surge to that level will surely send ripples through the crypto and altcoin market. The surge may also be possible if crypto week in the US House of Representatives brings promising results for the industry.