Bitcoin’s speculative nature is cooling off asinvestors shift their focus to safer digital assets. Market uncertainty, globaltrade tensions, and recent memecoin scams have reportedly led to reduced riskappetite. Key indicators show a decline in speculative trading,suggesting a broader market shift that could shape Bitcoin’s trajectory in2025.
Bitcoin Liquidity Drops as Investors Reassess Risks
Bitcoin’s hot supply, which measures the percentage ofBTC held for a week or less, has plummeted from 5.9% in late November to just2.3% by March 20, according to Glassnode.
#Bitcoin‘s Hot Supply metric, which tracks coins aged ≤1 week, has contracted from 5.9% to 2.8% of circulating supply – a 50%+ decline over the past 3 months. This signals a sharp reduction in liquid $BTC available for trade: https://t.co/VVw6YXRDHSpic.twitter.com/dfmTOyg5yr
— glassnode (@glassnode) March 20, 2025
This sharp decline indicates that fewer investors aretrading Bitcoin aggressively, opting instead for more stable positions. Anothersign of waning speculation is the stablecoin supply ratio (SSR), which measuresBitcoin’s supply relative to stablecoins.
The SSR has fallen to 8, its lowest level in over fourmonths, last seen when Bitcoin traded around $67,000 before its post-electionrally. Historically, an SSR below 10 suggests limited buying power for Bitcoincompared to its market cap.
Bitcoin Still Outperforms Traditional Assets
Despite the growing cautious sentiment, Bitcoin hasoutpaced traditional asset classes since the U.S. presidential election.Compared to stocks, real estate, and precious metals, Bitcoin remains atop-performing asset.
One key economic metric, the ICE/BofA U.S. High YieldIndex Option-Adjusted Spread (OAS), has dropped from 3.4% to 3.2%, signalingtemporary relief for risk assets, including Bitcoin and equities, Coindeskreported.
This spread measures the difference in yields betweenhigh-yield corporate bonds and U.S. Treasuries and serves as a gauge ofeconomic sentiment. However, some analysts warn that this relief may beshort-lived. As Trump’s tariff policies take effect, the OAS spread couldwiden, triggering renewed risk aversion.
Will Bitcoin’s Bull Run Continue?
While speculative activity is slowing, long-terminvestors remain optimistic about Bitcoin’s future. The Federal Reserve’smonetary policy and global economic developments will play a key role inshaping Bitcoin’s price action in the coming months.
For now, Bitcoin’s trajectory remains uncertain, buthistory suggests that periods of reduced speculation often set the stage forthe next major move.
This article was written by Jared Kirui at www.financemagnates.com.
