Bitcoin's low volatility indicates potential price increase in 2025

Bitcoin (CRYPTO:BTC) has experienced notable price fluctuations in December, particularly after failing to maintain a value above $100,000.

Despite this volatility, ARK Invest suggests that Bitcoin's movements are not unusual when viewed historically.

In its December report, "The Bitcoin Monthly," ARK analysed Bitcoin’s monthly and yearly realised volatility, which measures price fluctuations over time.

Although Bitcoin concluded the fourth quarter with increased volatility, the report indicated that this spike was not significant relative to historical data.

The accompanying chart revealed that Bitcoin’s monthly volatility was relatively low compared to its annual volatility during the same period.

This low relative volatility implies that Bitcoin has not yet entered a mania phase, suggesting room for further upward momentum, especially in a bull market.

“Indeed, these data points suggest room for further market expansion during 2025,” the report stated.

ARK highlighted several bullish indicators for Bitcoin in December, including mining difficulty and holder behavior.

Notably, 62% of Bitcoin’s supply has remained unmoved for over a year, even as the asset gained more than 100% in 2024.

In addition to these metrics, anticipation is building around the upcoming inauguration of Donald Trump, who has promised to support cryptocurrency initiatives in the U.S.

Trump’s election campaign included pledges to make America a hub for Bitcoin and crypto innovation.

His administration is expected to introduce crypto-specific executive orders shortly after taking office on January 20.

These developments have led analysts at Pantera Capital to believe that Trump's presidency could further legitimise Bitcoin and propel prices to new heights.

At the time of reporting, the Bitcoin (BTC) price was $96,472.14.