Bitcoin’s Volatility Is Dropping—And That Changes Everything
Philippe Laffont, the founder of hedge fund Coatue Management, had some interesting things to say about Bitcoin at Coinbase’s State of Crypto Summit in New York this week. The big takeaway? Bitcoin isn’t acting like a wild, speculative bet anymore. Its price swings are calming down, and that’s making it look a lot more like a traditional asset.
Laffont admitted that his firm avoided bitcoin for years because of its notorious volatility. But now, things are shifting. “It’s intriguing to me that maybe… the cost of getting into Bitcoin is shrinking,” he said. When he talks about “beta”—a measure of volatility compared to the broader market—he sees it dropping. And that, he thinks, could be a game-changer.
Institutions Are Paying Attention
Bitcoin’s price has climbed about 13% this year, but that’s not what caught Laffont’s eye. What stood out was how it moved during recent market turbulence. Back in 2022, bitcoin crashed more than 60% while the Nasdaq fell 33%. But this April, when new tariffs sparked a sell-off, bitcoin dipped just 5% while the Nasdaq dropped over 6%. That kind of stability is new.
It’s not just about price action, though. Laffont pointed out that fewer bitcoin holders are dumping their entire stash after just a month. “That’s come down a lot,” he said. People are holding longer, and that changes how the market behaves.
Then there’s the institutional shift. Big players like BlackRock are now backing Bitcoin ETFs—something unthinkable a few years ago. Laffont believes this is pushing Bitcoin toward becoming a standard part of portfolios. Right now, Bitcoin makes up just a tiny fraction of global wealth—about $2 trillion out of $500 trillion. But if more people see value in it, he argues, “it has to become more central.”
Regrets and Warnings
Laffont doesn’t hide his regrets. “Every night, I wake up at about three in the morning, and I go, ‘What an idiot. Why didn’t I invest more in bitcoin?’” he admitted. He overthought it early on, getting tangled in debates about use cases instead of seeing the simple truth: if people believe in it, the value grows.
Now, he suggests investors allocate a small slice—maybe 1% to 4%—of their portfolios to Bitcoin as a hedge. But he’s careful not to oversell it. “Never make it such a big portion that it becomes the driving factor,” he warned. A smaller, steadier position, he argues, is smarter than going all-in and losing sleep over it.
His clients, he says, fall into three camps: the trusting ones, the frustrated ones who ask why he missed the trend, and the skeptics who still avoid crypto altogether. That last group? “That’s the dying population,” Laffont said. Fewer people are in it every year.
Bitcoin’s wild days might not be completely over, but they’re fading. And for Laffont, that means it’s time to take it seriously—just not too seriously.
