Trace Mayer, the creator of the Mayer Multiple, posits that Bitcoin's decreasing volatility reflects its growing economic significance and is drawing in more substantial investments.
By James Van Straten, AI Boost|Edited by Jamie Crawley May 31, 2026, 1:00 p.m. 4 min readMake preferred on Trace Mayer (Trace Mayer)Key Points:
- Bitcoin's volatility has significantly reduced from approximately 120 in 2017 to around 35, attributed to increased institutional involvement and the stabilizing effect of options markets.
- Mayer asserts that lower volatility enhances Bitcoin's appeal to corporations, family offices, and institutional investors.
- Despite ongoing concerns regarding miner security and the potential impact of quantum computing, Mayer remains optimistic about Bitcoin's capped supply of 21 million compared to gold.
Article Overview
BTCBTC$73,769.60◢0.04%Bitcoin's BTC$73,769.60 volatility has long been seen as both a major advantage and a significant drawback. Recently, this volatility has subsided, stabilizing to approximately 35 from a high of 120 in 2021. While some critics interpret this reduction as a loss of Bitcoin's unique appeal, Trace Mayer, a seasoned Bitcoin investor and the creator of the Mayer Multiple, contends that they are misinterpreting the situation.
In an interview with CoinDesk, Mayer suggested that the decrease in Bitcoin's volatility is not indicative of weakness but rather a sign of its increasing economic substance.
“Gary Gensler mentioned he would 'tame bitcoin,'” Mayer stated, highlighting regulatory efforts to regulate the cryptocurrency. “And we’ve witnessed the volatility decrease.”
Mayer views this so-called “taming” not as a setback but as evidence of Bitcoin's extensive acceptance among institutional investors. The market has grown too substantial to fluctuate as wildly as it once did. “The barbell is getting heavier,” Mayer noted, using a metaphor to describe the market's liquidity. “It’s not a 50-pound weight anymore; it’s a 2,500-pound weight.”
This fundamental shift is largely driven by the intricate workings of the options market, particularly through the practice of call-selling, as per Mayer. Institutions and digital asset firms are increasingly selling covered calls on their Bitcoin holdings to earn immediate premium income, which inadvertently lessens price volatility.
These entities essentially commit to selling their Bitcoin at a set price in the future, compelling market makers involved in those trades to hedge their positions actively. When Bitcoin's price rises, these market makers sell the asset to manage their risk, effectively establishing a natural ceiling on price surges. The outcome is a more mature and predictable asset—one that is evolving before the market's eyes.
“When you can sell call volatility into the market, market makers are going to have to do negative delta,” Mayer explained. “That negative call wall adds weight to the barbell. The price doesn’t necessarily increase, but the total economic substance of that asset has grown.”
The Mayer Multiple Explained
Mayer developed the Mayer Multiple, a ratio that divides Bitcoin's current price by its 200-day moving average, eight years ago. This long-term trend line helps smooth out short-term fluctuations. A ratio above 1 indicates that Bitcoin is trading above its long-term average, while below 1 suggests it is trading below that average. Historically, readings over 2.4 have coincided with market peaks, while those below 0.8 have indicated favorable entry points.
Currently, Bitcoin's ratio is just under its long-term average at 0.94. Mayer highlights that the standard deviation bands—the statistical range in which price typically fluctuates—have significantly tightened as more trading data has accumulated.
In a five-year analysis, one standard deviation above the mean is around 1.3, two standard deviations at 1.6, and three at 2.13. This contrasts sharply with earlier periods, dating back to 2011, when prices frequently reached much more extreme multiples.
In essence, Bitcoin is maturing similarly to any asset that attracts deeper and more disciplined investment capital.
Mayer has been selling physically-settled Bitcoin call and put options since 2017 on LedgerX, one of the pioneering federally regulated crypto derivatives exchanges.
Today, that market has expanded significantly, encompassing leveraged ETFs like BITX, investments in companies like Strategy's (MSTR) equity, and Bitcoin now appearing on corporate balance sheets, such as SpaceX's reported holding of 18,712 BTC.
Mayer argues that reduced volatility is beneficial for Bitcoin as it signifies the asset's transition from a speculative tool to one that investment committees, family offices, and corporations can confidently support. “To gain that acceptance, the asset needs to be somewhat dull, like gold,” he remarked. “Gold is so unexciting—and that’s what we require.”
He pointed to the rising attendance at conferences as a concrete indication of this maturation. His blog existed in 2008 before Bitcoin's inception, and he frequently spoke at major gold conferences that attracted 2,000-3,000 attendees. “This year, we had tens of thousands at conferences, and even more last year. It’s a legitimate industry. It’s a true reserve asset.”
Mayer acknowledges potential threats to Bitcoin, such as the risk of diminished network security if Bitcoin's value does not rise sufficiently to keep miners operational. Quantum computing is another long-term risk if it advances enough to breach Bitcoin's cryptographic keys. While he recognizes this concern, he noted that Bitcoin's ongoing bounty for identifying a catastrophic exploit remains unclaimed and emphasized the backward compatibility of proof-of-work as a structural strength.
Despite these risks, Mayer firmly supports Bitcoin over gold for the next 15 years. “With gold, higher prices lead to increased supply. That’s not the case with Bitcoin, and we cannot predict what technologies might challenge gold's supremacy. There could be asteroid mining or AI robots exploring the oceans. However, we know Bitcoin will remain at 21 million.”
Bitcoin NewsAI Disclaimer: Portions of this article were generated with the help of AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For further details, see CoinDesk's complete AI Policy.More For You
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