Bitcoin’s Volatility Drop Catches Wall Street’s Eye
Philippe Laffont, the founder of hedge fund Coatue Management, had some unexpected things to say about bitcoin at Coinbase’s State of Crypto Summit in New York this week. The big takeaway? Bitcoin isn’t acting like a wild, speculative bet anymore. Its price swings are calming down—enough that traditional investors might finally take it seriously.
Laffont admitted his firm avoided bitcoin for years because of its notorious volatility. But things have shifted. “It’s intriguing to me that maybe… the cost of getting into bitcoin is shrinking,” he said. When he talks about “beta”—a measure of an asset’s volatility compared to the broader market—he sees a trend that could make institutional players less nervous.
From Boom-and-Bust to Steadier Growth
Bitcoin’s 13% climb so far in 2025 isn’t what caught Laffont’s attention. What stood out was how it handled recent market stress. Back in 2022, bitcoin plunged over 60% while the Nasdaq dropped 33%. This April, though, when new tariffs sparked a sell-off, bitcoin dipped just 5% while the Nasdaq fell more than 6%.
That kind of stability matters. But it’s not just about price movements. Laffont pointed to another shift: fewer bitcoin holders are dumping their entire stash after a month. “That’s come down a lot,” he said. People are holding longer, which changes how the market behaves.
And then there’s the institutional stamp of approval. BlackRock’s push into bitcoin ETFs, for example, signals a level of legitimacy that didn’t exist a few years ago. “When the biggest names get involved, others follow,” Laffont noted. Right now, bitcoin makes up a sliver of global wealth—around $2 trillion out of $500 trillion. But if that grows, he argued, it “has to become more central.”
Regrets and Warnings
Laffont didn’t hold back about his own missteps. “Every night, I wake up at about three in the morning and I go, ‘What an idiot. Why didn’t I invest more in bitcoin?’” He overcomplicated it early on, he said, getting lost in debates about use cases instead of seeing the simple truth: value grows when people believe in it.
Now, he suggests investors allocate a small slice—maybe 1% to 4%—of their portfolios to bitcoin as a hedge. His clients, he said, fall into three camps: the trusting ones, the frustrated ones who ask why he missed the trend, and the skeptics who still avoid crypto entirely. “That,” he said, “is the dying population.”
But even as he’s grown more bullish, Laffont warned against going all-in. “Never make it such a big portion of your portfolio that it becomes the driving factor,” he said. A small, steady position, held for years, could pay off more than a risky bet that keeps you up at night.
For now, bitcoin’s path seems less like a rollercoaster and more like a road—still bumpy, but navigable. And for Wall Street, that might be enough.
