Binance CEO Richard Teng has stated that Bitcoin's recent volatility is consistent with broader market trends, despite a significant 35% decline from its all-time high. Speaking at a media roundtable in Sydney on Friday, Teng attributed Bitcoin's sharp drop over the past month to investors reducing their cryptocurrency holdings and a general aversion to risk, mirroring patterns observed across major asset classes.
Bitcoin, the world's leading cryptocurrency, has experienced a 21.2% fall in November, extending losses over the past three months to 23.2%. This downturn has increased the likelihood of the cryptocurrency ending the year below $90,000. The decline follows Bitcoin reaching an all-time peak above $126,000 in early October.
Teng acknowledged the cyclical nature of asset classes, stating, "As with any asset class, there are always different cycles and volatility. What you're seeing is not only happening to crypto prices". He further explained that the current market environment is characterized by "a bit of risk (off) and deleveraging happening as well".
Global markets have experienced a sell-off recently, fueled by investor concerns regarding a potential valuation bubble driven by artificial intelligence. Even strong earnings from companies like Nvidia have failed to alleviate these concerns.
Despite the recent downturn, Teng emphasized that Bitcoin is still trading at more than double its value compared to 2024, a period that saw increased institutional interest and the launch of crypto investment products by firms like BlackRock. He suggested that profit-taking is expected after the crypto sector's strong performance over the past 18 months. According to Teng, "Any consolidation is actually healthy for the industry, for the industry to take a breather, find its feet".
However, some analysts suggest that Bitcoin's volatility is not necessarily in line with traditional markets. Bitcoin's price decline has also caused it to erase all of its 2025 gains, hitting its lowest level since April at $87,289.
Bill Maurer, director of the Institute for Money, Technology and Financial Inclusion at UC Irvine, noted that cryptocurrencies are "no longer a hedge against market risk". He explained that they "now track the rest of the market because uncertainty is elevated everywhere – trade wars, inflation, geopolitical shocks, jobs worries, the Fed's stance". Duke University finance professor Campbell Harvey concurred, stating that "In a risk-off situation, people dump their risky assets like stocks and bitcoin".
Despite the volatility, some argue that investors have historically been well compensated for Bitcoin's volatility. Fidelity Digital Assets reported in February 2024 that Bitcoin's Sharpe ratio from 2020 to early 2024 was 0.96, compared to the S&P 500's 0.65 over the same period. This suggests that while the "risk" in terms of standard deviation is higher, investors have been more than compensated for taking that risk.
