2026-01-02 22:21:43

In 2025, Bitcoin volatility has decreased by another 30% compared to last year, revealing profound changes in the market power structure behind it. The advantage of capital and information is increasingly concentrated among large institutions, making the market environment for retail investors more and more complex. From a game theory perspective, let's examine what kind of "game" institutional and individual investors are playing, and how ordinary people can find their own survival space.

**What Has Changed with Institutional Entry**

In recent years, the influx of Bitcoin ETFs has completely rewritten the rules of the game for institutional players. Daily net capital inflows often exceed 10 times the daily production of miners, which means fewer Bitcoins are circulating, and the price support has significantly strengthened.

But the strategies of institutions go far beyond simple buying and holding. They frequently adjust their positions based on macro factors such as interest rate changes and inflation data, while also using derivatives like options and futures to hedge risks. For example, on platforms like Deribit, open interest has exceeded $50 billion, indicating deep institutional participation in the derivatives market.

In this process, Bitcoin has gradually shifted from an "alternative asset" to part of a "risk asset portfolio," with increasing correlation to tech stocks.

**Retail Investors' Pressure and Breakthrough Opportunities**

The obvious disadvantage is access to information. Institutions can see ETF capital flows and on-chain data in real time, while most retail investors rely on delayed public information. Additionally, high-end derivatives products are often too costly for ordinary people.

However, opportunities do exist. The periodic cycle of Bitcoin halving is a key entry point—historical data shows that within 480 days after a halving, prices often reach new highs, providing a reference for dollar-cost averaging strategies. Moreover, phenomena like concentrated short liquidations (such as the short squeeze around $113,000 in Bitcoin in August 2025) can create opportunities for agile individual investors.

BTC0,72%

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GateUser-0717ab66

· 22h ago

Volatility has decreased by 30%. In other words, the game of big fish eating small fish has begun. Retail investors are still watching candlestick charts, while institutions have already been playing derivatives. What does the concept of 50 billion in open interest contracts mean? We haven't even entered the door.

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DefiOldTrickster

· 22h ago

Volatility drops by 30%? Haha, this is just the perfect moment for us arbitrageurs to celebrate. Institutions are securing steady returns while we look for cracks. The 480-day window during the halving cycle is like an ATM, and retail investors just need to avoid chasing highs to have a chance.

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MelonField

· 22h ago

Volatility drops 30%? Basically, institutions are happily accumulating, while retail investors are locked out by information asymmetry. --- Institutions play with derivatives, and we can only watch the K-line. This game has been unfair from the start. --- Halving cycles are talked about every year, but when it comes to critical moments, we're still being harvested. A rhetorical question: Have you relied on this to turn things around? --- Deribit has 50 billion in open interest... Just look at the number, and that's enough. In the end, it's still ordinary people paying the tuition for institutions' positions. --- Dollar-cost averaging is indeed the only way out, but the premise is that you have to survive until the 480 days after the halving. Haha.

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blockBoy

· 22h ago

The decline in volatility indicates that institutions have turned the crypto market into their own backyard, and retail investors are just the leeks. It's already good enough for retail investors to catch the bottom; don't think about overtaking on the curve. The halving cycle is indeed reliable; historical data is there. The $50 billion contract scale of institutions is something we simply can't play with. Information asymmetry is the biggest enemy; they are always one step ahead of us. Is a short squeeze an opportunity? You need to react quickly; my reaction speed might not be enough. Instead of studying game theory, it's better to just stick to dollar-cost averaging.

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