TLDR:

Bitcoin volatility collapsed after ETF launches as institutional trading compressed price swings significantly
ETFs and treasury firms buy ten times more Bitcoin than miners produce creating supply demand crisis
Major trading firms report poor returns on Bitcoin options strategies throughout current year period
Long-held Bitcoin positions unlock to meet demand as new supply proves insufficient for institutions

American entrepreneur Mark Moss believes the big Bitcoin’s anticipated correction will not happen. He shared these views during an interview with Coin Stories host Natalie Brunel. 

ETF launches have compressed volatility significantly. Institutional trading strategies have struggled to generate returns in this new environment.

ETF Impact Crushes Bitcoin’s Trading Volatility

Bitcoin’s price swings have diminished substantially since spot ETFs entered the market. 

Moss has observed this shift while working directly with treasury companies holding large Bitcoin positions. Major global trading firms attempted to generate yields through option rolling strategies. These efforts have produced disappointing results throughout the year.

The volatility compression marks a fundamental shift in Bitcoin’s trading character. Traditional strategies that relied on price swings have lost effectiveness. 

Institutional players now face reduced opportunities for arbitrage and options-based profits. This change affects how large holders monetize their Bitcoin holdings.

Treasury companies and financial institutions continue searching for viable yield generation methods. The reduced volatility presents challenges for these entities. 

Many firms hold substantial Bitcoin reserves that require active management strategies. Current market conditions have forced a reevaluation of these approaches.

Supply Demand Imbalance Reshapes Market Dynamics

Current ETF and treasury company purchases exceed new Bitcoin supply by roughly ten times. This creates an unprecedented supply demand imbalance in the market. 

New coins entering circulation cannot meet institutional appetite. The gap continues widening as more entities accumulate Bitcoin.

Existing demand has been satisfied through older wallet holders unlocking positions. These long-dormant wallets provide liquidity to the market. 

However, this source differs fundamentally from newly mined supply. The upcoming halving event will further reduce new Bitcoin entering circulation.

Moss suggests the halving’s impact may be limited under these conditions. 

Traditional supply shock narratives may not play out as expected. The market already faces severe supply constraints from institutional buying. Cutting mining rewards in half adds less pressure than previous cycles.

Market structure has evolved beyond simple halving cycle patterns. 

Institutional participation through ETFs fundamentally alters price discovery mechanisms. The compressed volatility environment may persist as long as these buying patterns continue. Traditional retail-driven boom and bust cycles appear less likely.

The post Expert: ETF Demand Crushes Bitcoin Volatility, Kills Expected Drawdown Scenario appeared first on Blockonomi.

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Filed under: Bitcoin - @ November 30, 2025 6:27 am