Bitcoin’s increasing appeal to institutional investors may come with a trade-off, according to Strategy executive chairman Michael Saylor. He explained that as the cryptocurrency attracts larger players, the associated price volatility tends to diminish, making the market less exciting for retail participants.
“You want the volatility to decrease so the mega institutions feel comfortable entering the space and increasing their positions,” Saylor said in a recent interview with Natalie Brunell on the Coin Stories podcast.
Michael Saylor says it is a “conundrum”
He elaborated on the dilemma, stating, “The conundrum is that if the big institutions step in and volatility drops, the market may become boring for traders and retail investors, leading to a decline in the adrenaline rush that initially fueled enthusiasm.”
“It’s like they had this big high and now the adrenaline is wearing off, making investors a bit bearish.”
Saylor views this as a natural phase in Bitcoin’s evolution, a sign of the cryptocurrency maturing. He considers the reduced volatility a positive indicator of the asset settling into its long-term growth trajectory.
The remarks come amid a period of market inactivity, with Bitcoin’s price consolidating after reaching a new high of $124,100 on August 14. Currently trading around $115,760, Bitcoin has remained relatively flat over the past month, hovering near levels seen at the end of August.
Market speculation centered on the upcoming Federal Reserve interest rate decision, with some analysts suggesting that additional rate cuts later this year could boost Bitcoin and broader crypto markets. While the September rate cut is largely priced in, expectations of further easing remain among crypto investors.
Divided opinions on Bitcoin’s future trajectory
Crypto enthusiasts are divided on where Bitcoin’s price is headed during the remainder of the year. While some, like BitMEX co-founder Arthur Hayes, forecast a surge toward $250,000, others expect a more modest increase to around $150,000. Conversely, analyst PlanC remains skeptical, suggesting that Bitcoin might not even reach its current all-time high this year.
Additionally, Benjamin Cowen has warned of the possibility of a 70% decline from Bitcoin’s peak, emphasizing the unpredictable nature of the market’s short-term moves.
Saylor emphasized that ongoing innovation in the Bitcoin space, along with new products and market education, is still in its early stages. He envisions a “digital gold rush” from 2025 to 2035, where numerous business models and financial products will emerge, creating both opportunities and challenges.
Currently, publicly-listed Bitcoin treasury companies collectively hold approximately $118 billion worth of Bitcoin, reflecting the increasing institutional confidence in the asset class.
