It has been an eventful journey. The surging of Bitcoin beyond $100,000 was a moment to celebrate, yet since the Fed's easing cycle began on September 18 and especially after the U.S. election, the digital asset class has had a lot to embrace and process.

Unraveling Bitcoin's Path in a Changing Landscape

Bitcoin Adoption Momentum: A Steady Force

Among digital assets, Bitcoin stands out with the most comprehensive regulatory support currently. In the US, one can gain exposure to Bitcoin through various means like native holdings, futures, ETFs, asset management products, or options. Its fixed ultimate supply of 21 million coins and a well-defined "monetary policy" make it an attractive option. With a better-understood investment narrative and context, Bitcoin is expected to be more integrated into individual, advised, and institutional portfolios. Adoption momentum will continue to drive Bitcoin's long-term price, while macro factors influence short and medium-term fluctuations. Every time a Bitcoin-skeptical article surfaces, it only reaffirms the persistence of this momentum.There is still ample room for Bitcoin's adoption to grow. Its unique features and the growing interest from various sectors ensure its continued relevance. As more investors recognize its potential, Bitcoin will likely play a more significant role in the global financial landscape.

Lower Bitcoin Volatility on the Horizon

The increasing number of Bitcoin holders and the availability of a wider range of financial instruments to access Bitcoin's price will help dampen its volatility. Options on Bitcoin ETFs in the US will enable more sophisticated and accessible risk management strategies. This has two important implications. Firstly, institutional-grade investors with specific risk management requirements and a more stable approach may be able to hold Bitcoin with the help of options. Secondly, retail investors can use the protection properties of options to avoid selling positions in a weak market, thereby reducing drawdowns. Additionally, retail investors are likely to sell Bitcoin call options against long ETF positions, a yield strategy allowed in retirement accounts, which will further depress options prices and volatility.This trend towards lower volatility is beneficial for the overall stability of the Bitcoin market and attracts a wider range of investors. It shows that Bitcoin is maturing as an asset and becoming more accessible and manageable.

Greater Sustained Breadth and the "5%-er Conundrum"

In the month following the US election, the broad-based CoinDesk 20 Index nearly doubled, outperforming Bitcoin's strong performance. The CD20/bitcoin ratio also saw a significant rise, as Ethereum and other blockchain assets came alive on the promise of more dedicated and usable digital asset regulation with the incoming administration in 2025. This trend is expected to continue, with the CD20's exposure to top digital assets reflecting the growth side of crypto along with Bitcoin's "store of value" appeal.For "5%-ers" - those investors who want to allocate to digital assets but lack the time to become experts in specific sectors or time the market - this presents a dilemma. In traditional asset classes, indexing provides a solution for access, diversification, and automatic rebalancing. We predict that regulatory authorities will allow investors to enjoy these benefits through easy-to-access wrappers.This development highlights the need for innovative solutions in the digital asset space to meet the diverse needs of investors. It also shows the potential for broader participation and growth in the crypto market.