Topic: Bitcoin Volatility (Read 235 times)

There is an opinion that with an increase in the adoption of bitcoin and its liquidity, price volatility will decrease. But I believe that volatility will always be a hallmark of this market in all its stages. But how it will actually be, time will tell.

But due to the high price volatility of the cryptocurrency market, you can make good profits in a short time, and this is what attracts a significant part of its participants. If it were not for the high price volatility of the cryptocurrency, it would not cause such great interest among people.

Not every Bitcoin user is using it as an investment, though. It's not reasonable to expect someone who relies on Bitcoin for their finances to have large shifts in their purchasing power so I understand where the concern is. IMO it's Bitcoin's biggest hurdle to widespread adoption. I do offer the counter point to concerns of volatility that Bitcoin's deflationary nature will insure that the purchasing power you have with crypto won't systematically be decreased by any central authority. No one can predict the inflation rate so it's not as if fiat doesn't have its own volatility issue. If you're dealing with unstable government, the currency can only exist as long as the government exists. There's nothing more unstable for fiat currencies than regime changes.

In any form of investment, risk would be present. And to most of the assets, expect volatility in the market price simply because the value depends on demand from the majority and demand on the other hand is changing because of several factors. Many people are indeed being scared or worried of engaging towarda this technology for the same concern but for sure many people stayed because of market price volatility. Investors have taken advantage of these changes because it simply generates profit faster than with other kinds of investment. Problem is people seek for what's easily earned which is why they do complain to such characteristic of this technology. Unfortunately, we cannot do something about it and no one's required to do it as well.

Financial counselors are naive to the potential of Bitcoin being volatile and the opportunity that comes with it cause the same volatility nature of Bitcoin is the reason why it's the world's most profitable asset.

The adage is to prevent investors from greed and make them focus more on risk management.

I believe the volatility of the Bitcoin market can only decrease when all 21 million coins are mine. People will value their BTC more and there's going to be high demand and little supply.

Bitcoin's volatility is a turn-off for those who are not used to fast-moving markets. maybe those who are familiar with the stock market and gold will indeed avoid the Bitcoin market because of the high volatility. but not too different. the stock market also sometimes has extraordinary movements when something happens to the project. and it affects the stock price.
I'm not sure this volatility can be suppressed or controlled. but what I realized, many of them entered the Bitcoin market because of the volatility that gave them the urge to play in the market.

Bitcoin volatility is the main reason why many people is interested on Bitcoin aside from the privacy feature. Bitcoin will not reach the current price from scratch if it’s price is not volatile and many people preferred Bitcoin this way for an easy growth on investment. Only regulators and Bitcoin critics usually use the volatility against Bitcoin while its beneficial if the volatility is continuously on the upside.

Bitcoin volatility will diminish if the Bitcoin supply will be evenly distributed to multiple user and not the current situation which many whale holders such as exchange, institutional investors and whales holds the majority of Bitcoin that can give huge impact to the price once they move their asset.

If Bitcoin wasn't volatile, it wouldn't be of interest to traders at all. As for long-term investors, they shouldn't worry over temporary changes as long as the general tendency of growth is there. Furthermore, I think Bitcoin doesn't have an issue of being not popular enough. It's been called the most successful performing asset a couple of times now based on its price dymanics over a certain period of time and Bitcoin continues growing over time, so there's enough interest to fuel that growth.
It's also worth noting that Bitcoin's volatility is pretty low during long periods, actually. It can stay within a small price range for a few months (like it stayed at around $20k in September and October, and then it was around $17k in November and December, and there've been longer relatively stable periods years ago), so it's not that bad, especially when you get used to it.

People think volatility as a dangerous feature of bitcoin but actually volatility is a good feature for those who desires to make investment in it because at higher price investment become risky. To cope with volatility it is necessary to hold bitcoin for lengthy time so therefore you will have no worries about the price's ups and downs.

A successful man is always a risk taker so if you are able to tolerate tough situation then success will be your fortune. Bitcoin is volatile but it always gives a positive outcomes to its user, some people loses money due to investment in bitcoin, the reason is not the volatility but the reason is their little knowledge and their quick decision during bear season.

As you know that in previous year the Bitcoin's price was very low but it doesn't persist for longer time and now it very high. Therefore a successful man is that who has patience at the time of lowering worth.

On the contrary, I like its volatility, if it is stable like gold, I will invest in gold instead of bitcoin because gold is safer and equally profitable. Those who don't like the volatility of bitcoin can consider other assets like gold, don't invest in bitcoin if you don't like the roller coaster feeling.

Yeah, the volatility is what making people take a look back and walk away, because they can't bear the price jumping up and down. The volatility is often of the biggest concern when it comes to crypto currency investment. But this should only be a problem to those are willing to hold short term and sell it quick. If those holders see the chart, they will realize that no matter what the volatility was, in the long run, it only went up. But this is for those that are going to use bitcoin as a store of value. Anyone that is going to use bitcoin as a regular currency, will actually avoid using it. One way to reduce Bitcoin's volatility is mainstream adoption. As more people use it for everyday transactions (instead of holding it and dumping it whenever they feel like), the demand and price fluctuations may become more predictable.

Ohh finally something decent and good to talk about, so let's start with the Bitcoin volatility and community attraction. I do agree that bitcoins volatility is the reason that many people invest in the Bitcoin market with appropriate time to make money as they belive in the bitcoin cycle and demand-to-supply efficient model. Things are changed now you can see in the crypto market from 2021 back to back stable coins are behaving crazily and these incidents put more of a bad impact on the investors most of them even myself too consider that Bitcoin is more stable as compared to crypto market Stablecoin and even with the rage of Inflation you can say that I coming days Bitcoin will be more effective, efficient and stable than fiat money.

The point when you compare the trust ratio the stablecoins lost their reputation in the market and I am expecting that at a particular time, the most Shaddy stable coin USDT will be the reason for the market crash and I am expecting that time very soon.

I think that bitcoin will always be volatile because it's nature. A lot of people are here because of it

Volatility usually increases when there is interest in an asset, or in periods in which emotion increases due to factors external to the asset (wars, government crises, etc.). It is therefore difficult to find a solution to decrease the volatility of an asset that is still "young" like bitcoin and therefore more exposed to speculation.

I am also curious about this what if in the future the market cap of Bitcoin is already huge just like already x10 or more of the market cap right now?
And another thing is what if the block rewards are already also very few?

I am thinking of as the market develops and adoption rises, bitcoin's volatility may decrease over time.

I think adoption of more strong hands than weak hands may make BTC to be less volatile. Fud and fomo are two reasons i think BTC's price moves up and down so much, Fud is when weak hands start dumping their BTC's in exchange for shitcoins on centralized exchanges or liquidating it for fiat, this makes the price to drop fast. Fomo is when people who refused to buy when the price is low and a little bit stable start rushing to buy when there is a sign of a pump, this makes the price to rise very fast. Because of these reasons, i think if we have 80% or more bitcoiners who are strong hands, volatility may reduce.

The volatility is based on supply chain, when the demand is high the market becomes volatile, but is actually good for traders were as they make more money when the price is not stable. If there was know Volatility and its value remain the same, many people couldn't buy it as it price won't pump. Same thing to hodlers of bitcoin where they can't profit if it isn't volatile.

What's the point of Bitcoin, or any kind of investment, if the price remains stable? Investments are supposed to yield results based on price fluctuations; if Bitcoin was somehow, hypothetically speaking, a stable currency, it wouldn't be what it is today, and investors wouldn't be intrigued by it. Even fiat currencies are volatile; a simple check at the EUR/USD exchange rate in the past two years speaks for itself. We wouldn't hold Bitcoin if we weren't anticipating a price increase in the upcoming years either.

That's the point of Bitcoin's volatility. If its price doesn't change for a long time which its value remain the same, many people couldn't buy its price as it won't pump. Same thing to hodlers of bitcoin where they can't profit if it isn't volatile. It's volatility increases more the possibility of benefits especially if you have prior knowledge and experience about Bitcoin.

If you don't have those knowledge and experience about how Bitcoin works, then it's volatility can be deadly for you and those losses that you get would benefit more to others.

The current Bitcoin marketcap is $552,393,326,519 which is really high to manipulate it, the government can print new money but it will increase inflation rate. When the Bitcoin circulation supply already near to 21 Millions and the demand is high, the Bitcoin price will keep increase. It's just a matter of time the volatility will decrease and Bitcoin price could be more stable.

If Bitcoin price was $1,000 and now $10,000 it's mean the price is 10x times higher.

But if Bitcoin price was $1,000,000 and now $1,100,000, it's just 10% even though the increment higher.

Exactly, the volatility of bitcoin is the reason for us to invest in it instead of other assets, high volatility will generate big profits, and I see that as the advantage of bitcoin rather than fear it. But the volatility of bitcoin is decreasing and getting smaller, bitcoin is no longer growing thousands of percent like in the early years of its development. Its profit is getting smaller and smaller compared to shitcoin, and that's also why people don't choose bitcoin but choose altcoin to invest.

Price tracker sites, visible trading activity (spot market, futures), they cause real visible volatility.

I actually can't expect the volatility to decrease, because basically bitcoin supply is only concentrated to a few centralized wallets and there aren't as many bitcoin users as revealed in various statistics and surveys. Someone who has an interest and "power" can expect that any price will change in a short time, because it really only needs to add a few digits when bitcoin is traded on a centralized service.

Agreed, I saw people avoid bitcoin because of its volatility, but I love bitcoin for that. Volatility gives me more chances to buy bitcoin and store them for the future. I don't know which financial counselors advise people not to invest in bitcoin but I am sure that those so called gurus don't have any prior knowledge about finance.

It is able to turn on or turn off some people that depends on types of people. People who can abuse it to get profit will like it but people who get loss with it will turn themselves off after losing dramatic capital.

Always true that the market is a zero-sum game and money does not automatically appear more or less, it only moves from one to another person and change between accounts or pockets.

Investment and trading is risky and risk means potentially loss so that advice is true. It is helpful for you to force yourself to be more prepared before joining by learning more, practicing with demo accounts more.

More regulations, bigger trading volume, less effects from fuds by better regulations enforced, less impacts from Bitcoin halvings.

Markets are still very shallow. Once the mass adoption of Bitcoin is complete, there will be more buy and sell orders in the market and price movements will have less volatility. I think volatility is an important detail that shows us that mass adaptation is not yet complete. Once the mass adoption is complete, buyers and sellers will build up enough density and we won't see high volatility again. That's why I think we should enjoy these days. We have to make sure that we buy enough Bitcoins during periods of extreme depreciation. :)

Meanwhile, stocks are also volatile but they never talk about that because that's what they want for people to buy.

It won't be gone but it's likely to reduce overtime as we go approach for those halvings but it will take a lot of time before we finally see it reduced.

And if there's one thing with that, even if we talk about its volatility will be reduced or not, all of it are gonna be unpredictable.

To diminish Bitcoin's volatility one must address the factor that affect volatility. And these factors are:

• Securities supply and demand
• Geopolitical variables
• Factors of socioeconomic status
• An options contract’s expiration date

And the cause of price volatility

• Seasonality and Weather
• Sentiments

you can read the explanation of each on this article[1]

Now if we are able to control this factors and causes, we can minimize the volatility of the price of Bitcoin but the question is, can we control these factors and causes?  Obviously no.  So there is no way to remove the volatility of Bitcoin.  The fixed supply may affect volatility but it is not enough to remove volatility of Bitcoin making it act like a stablecoins.

In conclusion, Bitcoin will always be volatile.

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[1] https://www.tickertape.in/blog/volatility/

I think what you actually call a limitation to bitcoin is actually what drags people more to invest. for example bitcoin first rise after it was created saw many people to become more aware of the sudden rise and many people were still scared though that the price might not go up again and so decided not to invest but that when volatility comes in play because the price will definitely drop which now creates a window for people to invest knowing fully well its going to go up. Its volatility makes it stand out from  every other coins which eventually die off. Bitcoin is very unique from all other altcoins and I know this as I was given a window to start investing last year when the price dropped drastically after hitting its all time high.

why is Bitcoin volatility deadly? I don't think it's deadly because that's what can make people become/benefit,
indeed the adage "invest only what you can afford to lose". always be the main benchmark in investing in crypto but not forever we will experience losses there will definitely be a win one day if we patiently wait

You can look at it that way and see bitcoin's volatility as a not-so-good thing since "hurr durr could drop bitcoin's value to zero in one go hurr durr", which is true don't get me wrong, but purely situational and would almost always not gonna happen in the real world. At the same time, this "volatility" is what makes bitcoin's value pump sporadically, granting tons of users massive amounts of profit, bigger than any investment you could ever make in your life. So will you look at the glass and see it as half-empty or half-full? It's just a matter of perspectives really.

I personally believe the volatility in Bitcoin is one of the major reason why people are making money off Bitcoin and that's why Bitcoin is been referred to as an asset and I don't think the volatility will ever get diminished and if it ever does, then I don't think most persons will still want to be in Bitcoin.
On the other hand, I doubt if the volatility of Bitcoin is the reason why people are been turned off as I think the volatile nature of Bitcoin is one major reason why people are embracing Bitcoin more so as to earn some good profits off their deposit.
People need to learn more of risk management rather than bother over volatility.

On the contrary, I think majority loves its volatility because that's how they make some money. I'm not saying that there is manipulation by some entity to make it as volatile as they want it to be so that they can buy cheap and earn profits in short term, but that's how the game is being played now. The rules have been change already when whales enter the ecosystem.


It won't, there are traders around the world, constantly buying and selling. So the price is going to change no matter what.

And obviously, there are no central authorities who's going to call and handle it's price fluctuations.

More precisely this is the level of risk that many counselors advise against getting involved in investing in bitcoin and of course in relation to Crypto as a whole.

If bitcoin had a level of stability then I would never think it has the value it has today and it could be that bitcoin would not last or even have disappeared in previous years. What makes people believe in investing in Bitcoin because the price fluctuates, there are many opportunities to double profits in a certain period and even though the risk cannot be ignored, people already understand the pattern of investing in bitcoin and volatility is an inseparable part.

The rise and fall of bitcoin prices is one of the events that cannot be separated in the market, this will apply as long as bitcoins can still be traded, because that is what causes bitcoin to be more valuable today.

Volatility is relative.  My cost basis is $50.  I don't worry much about volatility any more.

What causes fluctuations is supply and demand and their distribution. In the early years, the supply of Bitcoin was large and the demand was fluctuating so that the number of people trading in Bitcoin was counted with fingers, and therefore it is easy to find that the price rose by 50% during the day.

If we reach a market capacity, for example, 10 trillion, and the supply is limited, then the demand will be shy, and therefore there will be no change in the price.

The whole secret is the distribution of live retailers.

i can buy a 24pack of pepsi for £8($10) in the bulk aisle
meaning each tin-can is£0.33($0.42)

however in the same retailer buying just a single tin-can in the snack aisle is £0.80($1)

the same retailer has a cafe that does food deliveries where ordering a tin-can of pepsi with fastfood delivery is £1.50($1.85) for just the can of pepsi

meaning fiat fluctuates the price of goods by £0.33-£1.50($0.42-$1.85) ~4x+

a 5x difference.. and no one bats an eyelid at the prices differences of the same product from the same retailer but just in different sections of the store.

..
a clothing retailer january2022 had winter coats at £50($62) and in spring offered 70% discount at £15($18.50)
this year the same coat right now is £60($74)
again no one bats an eyelid of a £15-£60($18.50-$74) 4x multiple

what those in power want to make people beleive is that they are unable nor should ever expect anything better than a 2% savings return. 1.02x .. yet they avoid showing that fiat loses people upto 4x of value depending on when or where you purchase

Since when is Bitcoin's volatility a turn-off? It might be for some, but I honestly don't understand those few who are put off by it, since that's what enables you to multiply your money. And that applies to pretty much everything, be it stocks, gold, or other commodities; all of them are volatile, maybe not as much as Bitcoin, but still may go through great price fluctuations during a market crisis or an unfortunate event.

Personally, I find its volatility intriguing; certainly, it's not always positive, but nonetheless, it's what made Bitcoin what it is today. This isn't the first thread that mentions Bitcoin's volatility as a possible threat, which is frustrating.

Bitcoin's volatility is continuously lowering. It is much less volatile today than a few years ago. And a few years ago it was much less volatile than it was a few years before that. A few years from today it will be less volatile than it is now.


Volatility naturally goes down as its value grows because it gets harder to move the price. And also because there are fewer dollars that will come in to change the price. If we pretend there will eventually be 10 trillion dollars that will be in Bitcoin, a 1 trillion dollars there is less outstanding money than at 1 billion dollars so less money will come in to change the price. So when most of the people in the world who want Bitcoin already have bitcoin volatility will be far lower not just because there will be so much more money in it so it'll be harder to move, but because there won't be huge pumps and dumps of people coming in and going out of the market.

It will of course never be stable, as nothing with a free market is stable, but its volatility will continuously go lower and lower over time as has already happened throughout Bitcoin's price history. Even today its much easier to trade altcoins rather than Bitcoin because Bitcoin's volatility is far lower than it used to be while altcoins are tiny market caps that are essentially 100% speculation and so they maintain very high volatility.


People who say Bitcoin is risky because it is volatile are either only interested in short term trading/investing or they don't understand the difference between volatility and risk and they are likely just repeating what they heard other people say who also don't understand the difference.

Bitcoin's volatility is one of its features that turns off a lot of people. When someone expresses interest in investing, the majority of financial counselors advise them to avoid doing this. Because it is one of the most volatile assets ever, I believe that is why the adage "invest only what you can afford to lose" exists.

My query is: How will Bitcoin's volatility diminish over time, or what is the single biggest element that could result in a reduction in Bitcoin's volatility?