Bitcoin has long had a reputation for being one of the most volatile assets. But in 2025, the tables have turned and this week marked a milestone that challenges that narrative. Amid the Federal Reserve’s rate cut, All companies in the Nasdaq 100 index became more volatile than Bitcoin.according to realized three-month volatility.
A similar change is also visible at shorter and longer horizons. In one year, Bitcoin’s observed volatility fell to around 44%, close to a historic low. That makes it less volatile than 99 of the 100 companies in the index, with only industrial gas giant Linde still slightly below it, although Bitcoin is on track to fall below it in the coming weeks. This is a big improvement from just a month ago, when Bitcoin was less volatile than 91% of the index.
On the 1-month measure, Bitcoin also outperforms almost the entire index, proving to be more stable than 96 out of 100 stocks. Notably, Despite this lower volatility, Bitcoin continues to outperform most stocks in terms of performance.proving that it can generate strong profits with less risk.
Bitcoin Outshines All Magnificent 7 Companies in Terms of Risk and Return
One of the most notable examples of Bitcoin’s improving position versus stocks is how it compares to the Magnificent 7, which includes Apple, Microsoft, Nvidia, Amazon, Meta, Tesla, and Google.
Last year, Fidelity highlighted that “Bitcoin’s volatility doesn’t seem like an outlier” compared to megacaps, which are in the middle of the pack. Today, Bitcoin’s observed volatility is lower than that of each member of the group.showing greater stability than stocks that dominate stock market gains.
But volatility tells only part of the story. To assess whether the returns are worth the risk, risk-adjusted metrics are key:
- He sharpness ratiowhich measures returns relative to total volatility,
- He sortino ratiowhich specifically analyzes the downside risk,
- AND CAGRreflecting compound growth over time.
In these metrics, Bitcoin leads across the board against all members of the Magnificent 7. This week, Bitcoin’s 1-year Sortino rose to 2.38with a Sharpe 1.44 – both higher than most Nasdaq stocks.
What makes this change more telling is the direction of the change throughout 2025. Bitcoin’s Sharpe and Sortino have been stable or improvingindicating that returns are being generated with less downside volatility and better overall efficiency. For the Magnificent 7, the opposite is true: the ratios that were high at the beginning of the year have deteriorated. Nvidia, for example, saw its Sortino collapse since 3.19 in January to 1.07 in September, while Apple fell from 1.77 to 0.3.
The only outlier is Google, whose Sharpe ratio temporarily surpassed that of Bitcoin thanks to a double-digit price rally over the past month.
And yet, the reduction in risk has not come at the expense of profitability. While volatility has cooled, Bitcoin has continued to outperform major stocks, with a 1-year CAGR reaching 94%.
Why Bitcoin is quieter than stocks and what comes next
Bitcoin volatility has been steadily decreasing each year and 2025 is no exception. Its 1-year realized volatility has already decreased by 17% since January, while its 1-month measure has fallen by 30% during the same period. There are two main reasons behind this trend.
First, the asset has matured: as Bitcoin’s market capitalization grows, the same inflows or outflows that once caused sharp swings are now dispersed over a much larger base. New capital inflows simply do not move the marginal buyer or seller as dramatically as they did before.
Since Bitcoin was confidently outperforming the rest of the stock market and saw an improved liquidity landscape, its scale-driven volatility was reducing at a faster pace. This is also why Bitcoin has been recording smaller scale bull runs with each consecutive cycle.
Second, Bitcoin is increasingly perceived as a store of value, not a speculative, asset. This can be seen amid Bitcoin’s resilience during the recent market crises.
In April, Trump’s reciprocal tariff announcement drove stock volatility to its highest levels since the COVID crisis, and the Nasdaq 100’s weekly realized volatility increased more than fivefold. In comparison, the equivalent Bitcoin indicator “only” tripled.
Again in August, weaker jobs data and a lower-than-expected PPI report doubled the monthly volatility of the S&P 500 and Nasdaq 100, but Bitcoin volatility increased only 70%. These smaller reactions to external shocks have made Bitcoin’s observed long-term volatility appear calmer than most Nasdaq names.
At the same time, Bitcoin’s declines are becoming less severe. Previous cycles were marked by brutal 70-80% declines, cementing its reputation as a high-risk asset. However, throughout this cycle, some of Bitcoin’s corrections have been milder than those of the S&P 500 or the Nasdaq. This not only reinforces the observed decline in volatility, but also shows greater resilience during downturns.
Conclusion
For years, volatility was one of the most popular factors that kept many institutional investors away from Bitcoin, considering it too unpredictable to fit into traditional portfolios. However, what was once a weakness may now be turning into a strength: Bitcoin may now look like a relatively safer bet than many conventional stock options. With its market structure maturing and its reactions to macroeconomic shocks increasingly muted, Bitcoin’s volatility is likely to continue to decline, reshaping how the asset is perceived in the broader financial landscape.
Sources
The data used for this research consists of publicly available information from TradingView, Fidelity, MarketWatch, and CheckOnChain. Volatility, Sharpe, Sortino and CAGR comparisons were made on September 17, 2025, reflecting market conditions and price dynamics observed on that date.
