Introduction
Bitcoin’s grinding price action and subdued volatility signal a fundamental market evolution rather than cycle failure, according to Galaxy’s head of research. The transition from early adopters to institutional holders is creating a more mature, resilient asset class. Current price resistance stems from US-China tariff tensions rather than deteriorating fundamentals, with the bull run evolving into a more sustainable pattern of institutional accumulation.
Key Points
- Bitcoin's volatility has dropped to 29% (90-day realized), far below 2017 and 2021 cycle peaks, indicating market maturation
- Three of four largest global custody banks have launched or announced digital asset custody services, accelerating institutional adoption
- US-China tariff tensions caused recent leverage washout and stalled October rally, with resolution potentially reigniting risk appetite
The Structural Shift: From Early Adopters to Institutional Hands
According to Alex Thorn, Galaxy’s head of firmwide research, Bitcoin’s current market behavior represents a fundamental transformation in ownership structure rather than a failed bull cycle. The “significant distribution from old hands to new hands” has created temporary resistance but ultimately represents a “healthy” process that is widening ownership and maturing the market. This transition from early Bitcoin adopters to institutional investors is creating a more stable foundation for long-term growth, with Thorn noting that “the era of the early bitcoin adopter is now finally, I think, fully coming to an end.”
The institutional distribution channels are becoming increasingly sophisticated, with Thorn highlighting wealth-platform access and custody bank initiatives as powerful accelerants. He specifically cited Morgan Stanley’s move to allow advisors to recommend 2-4% allocations through spot ETFs and revealed that three of the four largest global custody banks have either launched or announced digital-asset custody services. This institutional infrastructure development is replacing the old, concentrated holder base with a more diversified ownership structure that Thorn believes will transform Bitcoin into “a widely owned macro asset in everybody’s portfolio.”
The psychological and structural significance of the $100,000 threshold cannot be overstated in this transition. Thorn framed it as a clear line of demarcation: “Maybe we delineate there the pre-$100K bitcoin world versus the post-$100K bitcoin world. I think it’s going to look a lot different.” This transition period explains why the market feels both heavier and sturdier than past cycles, with passive ETF bids absorbing original Bitcoin supply at psychologically significant round numbers without the “massive uplifts” that once followed fresh all-time highs.
Volatility Decline and the Macro Regime Shift
The most striking evidence of Bitcoin’s maturation comes from its dramatically reduced volatility. Current 90-day realized volatility readings near 29% stand far below the peaks seen during the 2017 and 2021 cycles, indicating a fundamental shift in market dynamics. This declining volatility reflects what Thorn describes as “sort of crab” market action, with Bitcoin “still climbing a wall of worry” but doing so in a more measured, incremental fashion.
This volatility compression coincides with Bitcoin’s evolution into what host Joe Consorti summarized as “more of a macro trade than anything… moving much further into… being impacted… by the macro regime.” The asset is increasingly responding to broader economic forces rather than crypto-specific catalysts, with Thorn noting that BlackRock and Fidelity are actively promoting the “digital gold narrative” that positions Bitcoin as a risk-off, non-sovereign scarcity hedge asset.
However, Thorn emphasized that Bitcoin hasn’t fully converged with gold’s trading patterns yet because “markets move on the margins,” and marginal flows still treat BTC as risk. The researcher expects this to change as more supply moves into the hands of registered investment advisors and passive vehicles, predicting that Bitcoin “will… trade a lot more like a risk-off, non-sovereign scarcity hedge asset” as institutional ownership expands.
Tariff Tensions and Revised Price Outlook
The primary near-term headwind capping Bitcoin’s upside, according to Thorn, is exogenous rather than structural: US-China tariff risk. The researcher identified statements on October 10 about potential 100% levies on China as the catalyst that “caused a leverage washout and stalled a strong October.” He described this as the decisive swing factor for Bitcoin’s near-term direction, noting that “quite simply an abatement of the tariff war between the US and China… would sort of set us right back on course in risk markets.”
Against this backdrop of geopolitical uncertainty, Thorn has revised but maintained his bullish year-end targets. “At the beginning of the year, I was calling for $150,000 and then $185,000 in Q4… I am going to materially draw down that prediction to maybe like $130,000 by EOY,” he stated. This adjustment reflects the temporary impact of tariff tensions rather than any structural deterioration in Bitcoin’s fundamentals or adoption trajectory.
Looking beyond immediate geopolitical concerns, Thorn described 2025’s path as a “slow, volatile stair-step higher” with realized volatility continuing to decline. The base case he outlined is not euphoria but endurance, with the bull run evolving rather than dying. While acknowledging the complexity of macro cross-currents, including what he called “the most important trend in markets”—the AI capital-expenditure boom—Thorn maintained that Bitcoin’s microstructure transformation provides a sturdier foundation than in previous cycles.
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