Bitcoin's historic volatility has dropped sharply from a high of 120 in 2021 to around 35, which some interpret as a loss of speculative edge. However, Trace Mayer, creator of the Mayer Multiple, argues this compression is a sign of growing economic substance and institutional adoption. In an interview with CoinDesk, he explained that the options market, particularly call-selling by institutions and digital asset companies, is creating a structural dampening effect. These entities sell covered calls on their bitcoin holdings, forcing market makers to hedge by selling when prices rise, effectively capping volatility. This mechanism, analogous to adding weight to a barbell, increases bitcoin's total economic substance. Mayer's Mayer Multiple ratio, dividing the current price by the 200-day moving average, currently sits at 0.94, below the long-term trend. He notes that standard deviation bands have compressed, indicating a maturing asset. Lower volatility, he believes, makes bitcoin more attractive to investment committees, family offices, and corporations seeking a boring, reliable store of value like gold. While risks such as weakened network security from insufficient mining incentives and quantum computing threats exist, Mayer remains confident in bitcoin's capped supply of 21 million as a fundamental advantage over gold.

Key facts

• Bitcoin volatility dropped from 120 in 2021 to about 35, signaling maturation.
• Mayer credits call-selling by institutions for dampening price swings.
• Mayer Multiple ratio currently at 0.94, indicating price below 200-day average.
• Lower volatility attracts institutional and corporate capital seeking stable assets.
• Mayer sees bitcoin's fixed 21M supply as key advantage over gold.

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