Bitcoin’s Speculative Nature Cools Off

Bitcoin’s speculative nature is cooling as investors prefer safer digital assets. Market uncertainties, global trade tensions, and recent memecoin scams have reduced risk appetite, impacting speculative trading and Bitcoin’s future.

Bitcoin Liquidity Drops as Investors Reassess Risks

Bitcoin’s hot supply, measuring the percentage of BTC held for a week or less, plummeted from 5.9% in late November to 2.3% by March 20, according to Glassnode.

> #Bitcoin’s Hot Supply metric, tracking 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/VVw6YXRDHS pic.twitter.com/dfmTOyg5yr
> — glassnode (@glassnode) March 20, 2025

This significant decline indicates fewer investors are trading Bitcoin aggressively, opting instead for more stable investments. Additionally, the stablecoin supply ratio (SSR), measuring Bitcoin’s supply relative to stablecoins, has fallen to 8, its lowest in over four months, suggesting limited buying power for Bitcoin compared to its market cap.

Bitcoin Still Outperforms Traditional Assets

Despite the cautious sentiment, Bitcoin has outperformed traditional assets since the U.S. presidential election. Compared to stocks, real estate, and precious metals, it remains a top-performing asset.

The ICE/BofA U.S. High Yield Index Option-Adjusted Spread (OAS) has dropped from 3.4% to 3.2%, indicating temporary relief for risk assets, including Bitcoin and equities. However, analysts warn this relief may be short-lived if Trump’s tariff policies take effect, potentially increasing risk aversion.

Will Bitcoin’s Bull Run Continue?

While speculative activity is slowing, long-term investors remain optimistic about Bitcoin’s future. The Federal Reserve’s monetary policies and global economic developments will significantly influence Bitcoin’s price action in the coming months.

Currently, Bitcoin’s trajectory is uncertain, but history suggests periods of reduced speculation often precede major market shifts.