First of all is welcome to the world of cryptocurrency, i am not so new in crypto world but i am also not an expert i'm still learning about bitcoin everyday. If i may ask you a question, as an economist what do you think will affect bitcoins price hike and dips? Because to me as an average joe there are some factors that are just obvious like if a country bans bitcoin then there are these people who trade and do panic selling sometimes it affects the price, but what i would like to know more are the reasons that are not obvious like you thought it would not affect bitcoin but then somehow that may contribute. Hope to learn more.
I think you'll do great in this community based on your experience.
Thanks lucifochrome,
First of all I have to be clear and honest. I am not the most experienced person in the world, not the most knowledgable. I just know the ABCs.
Answering your post:
1- As long as cryptos and wallets, and blockchain are open source, not even all the governments of the world can stop it.
2- the fluctuation at this stage is so natural because it is too early, still very few adopters. Maybe if you try find some historic data about Bitcoin price volatility, you will find the volatility at previous years were much higher and that volatility is being less as time passes. This is mainly because - as we all know the theoretical ABCs of the so called perfect competition and market equilibrium, it assumes there are a lot of buyers, a lot of sellers, each controlling a very negligible amount of demand and supply so that he can’t dictate a price. Comparing this to a monopolist, he can “dictate” the price.
So, as more and more buyers and sellers come in, the power of everyone to dictate the price gets reduced, so volatility is reduced.
3- the panic sell, or the hurd crazily buying, this is normal to human nature. It happens in the stock markets. Warren buffet made his fortune understanding this fact.
4- Currently I see crypto has just started to be a fact of life. It really exists as an asset, there is a “market”, there is value and price. It is now like hotmail at the beginning of the internet, not everybody had an account, an email was not at that time a document that proves anything as compared to signed paper sealed received and kept in a safe place in a file. Later it became a proof, contracts can be done by emails.
Crypto is still the hotmail of mid 90s.
Unfortunately it is still like a bullion or an ingot, not as a currency 100%.
It is just a matter of time, still there are some aspects that should be addressed as I mentioned in my previous post.