Topic: Is bitcoin too volatile? - page 5. (Read 7933 times)

Market pegged assets might be a solution to volatility of crypto currencies https://bitsharestalk.org/index.php?topic=11674.msg154433#msg154433
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I guess you didn't understand the question. But before I ask again, I'll clarify a few things. Of course Bitcoin is trades and found in various fiats. [insert Jackie Chan meme here] And everything you said was spot on too.

I was opening up to discuss Arbitrage. Which is something that people need to understand to gain on Bitcoin's volatility.

Te value is general, really measured against all goods. Since it is often traded against the various fiats, it is easy to discover the price of bitcoin in those fiats. But this is not necessary. Bitcoin can also be bought for diverse consumer goods, which is the same as diverse consumer goods can be sold for bitcoin.

Bitcoin can be viewed as a commodity. Since it can not be consumed or not produced (in the end), it can only have speculative (monetary value). And for practical reasons, the dual trade deal most of the time has money as one of the goods exchanged. We call it indirect trade using money, but if you want to know how much it is worth, it is best to view it as just another good on the market.

We offer calls anywhere and try to keep the price/minute locked for December. If the price is not volatile more merchants will be able to sell really in Bitcoin . It's not possible yet for a merchant to have at least 50% of the business in BTC. If this would be possible then the exchange rate could be partially ignored.
Huge companies like VW make a lot of money with the exchange rate. Usually they balance and keep the market stable , we need this for the BTC too.

It is very complicated.

How is Bitcoin valued against?... USD, Yuan, Yen, Euro...?

if it is lets say $100 USD... 614.295 Yuan... If USD Rises in price... What is Bitcoin's price?

Indeed.  What bitcoin now needs, is more stability, not more volatility.  And honestly, I think that that is what is going to happen, with all the trading tools around.  No trader is going to let the price surge to astronomical heights without cashing in seriously on that - which will dampen the rise.  In the same way, no trader will let the price drop to terrible depths, without cashing in on that through shorting.  Of course, short-term manipulations, cornering markets, pump and dump and all that will continue to exist.  But the army of traders around the world will actually stabilize prices, and reduce volatility in my opinion - so that only slower motions are thinkable.

If bitcoin is going to pretend to be a reliable store of value, and currency, then volatility needs to go down.  In fact, the price doesn't matter for currency.  It is better to have low and less volatile prices, rather than jumps to $3000.- followed by crashes to $50.-.  That can be fun for traders, but that's no fun if you want to use it as a currency, or as a store of value.  In fact, my opinion is that this would be so much fun for traders, that they will trade it away.

And then, the price will follow the market offer and demand.

I think bitcoin would become much more accepted as a currency if it were less volatile.  And I think that's what's going to happen.

I guess the "Is bitcoin too volatile" discussion is over now that the price is stabilizing between $300 to $400.

A few months ago, it was the talk of the time, but now everyone is worried about the price, being too low. 

We seem not to be satisfied, with anything BTC has to offer. 

This is so true. Wages paid in bitcoin is not enough. If business-to-business transactions can be made to settle in bitcoins, bitcoins network effects would go up by another order of magnitude that would actually stabilize the price.

Grandma who is looking for stability and security is going to be the last person to the Bitcoin party. The volatility of Bitcoin is why it is so incredibly sexy and exciting. Bitcoin is the fucking Wild West, and it will continue to be a crazy ride for some time. In fact, I think it is going to get crazier, a lot crazier. Bitcoiners may be basement dwellers, but they have balls of steel that make that tattooed, musclebound, motorcycle driving douchebag outside look just as clueless and impotent as grandma.

Traders are making a lot of money, traders are losing a lot of money, but one thing is for sure, Bitcoin attracts traders like honey attracts ants. They are all over it, providing the critical liquidity without which bitcoin couldn't survive. Bitcoin is big, everyone knows that. Why do you think we are inundated with trolls? Trolls are attracted to enthusiasm like flies are attracted to a picnic. If Bitcoin were stable and secure and everyone knew basically what is was and what it ever would be, no one would really care. Fortune 500 tech companies are constantly trying to create some new piece of shit "innovation" to generate even a taste of the kind of enthusiasm Bitcoin has created.

I agree with that.  The only way to go for bitcoin is merchant adoption.  I know that people say that this will not increase price, because it increases velocity.  Probably true.

However, consider this.  If there is initial merchant adoption, those merchants have to pay their stuff in fiat, so they convert immediately in fiat, to avoid the exchange risk.  Prices are still based in fiat, and only converted into bitcoin.  
However, the more there is merchant adoption, the more it will be interesting for merchants to keep some coins, to pay their suppliers who accept bitcoin too, in coins (and avoid double exchange costs).  When merchant adoption will generalize, there will be much less incentive for a merchant to immediately convert to fiat.  It may also begin to become interesting to receive (part of your) salary in coins directly.  Prices would still be first quoted in fiat, and then converted in bitcoin, at current exchange rate.  But the more trade is done directly in coins, the more there will be a desire to have prices quoted directly in coins, not and not floating conversions in fiat.

I can ONLY think of this as the way of adopting bitcoin.  And that may take quite a while.  

Yes it is, and only wider adoption will help here.

@bornil267645

Is still not enough. If you get pay in Bitcoins on Monday and you could buy 10l of Milk with it, but on  Friday only 8 then it is to volatile.

well the recent price says that it can be steady if no one disturbs or try to manipulate it.

Google for Paybase and Paycoin, it's new and i believe in it already

Paycoin -> BTC -> Fiat and visa versa

Lets hope that will bring more stability in cryptoland, including bitcoin

First step can happen in January - if PayPal gonna accept Bitcoin.. 

volatility is great that's why wall street is going crazy for bitcoin. 2015 is going to be a special year

No, you can't. You will definitely loose purchasing power through inflation.

You're taking the wrong perspective, because you use these fiat currencies as valuation references for Bitcoin. If you take Bitcoin as valuation reference you'll see that fiat currencies are fluctuating wildly... If every product would be priced primarily in BTC, price changes would be much lower.

Even if we take the Bitcoin volatility hypothesis for granted, it's not a real problem. People have been able to cope with wild price fluctiations even before the information age easily. With information technology, volatility is even less a problem, because all price conversions can be done automatically.
Also, Bitcoin's volatility will decrease with growing market capitalization.

I think the Bitcoin volatility hypothesis was first propagated by actors associated with central banks who want to scare people away from a better alternative to their inflationary fiat scam.

ya.ya.yo!

The more I read and learn about Bitcoin, the more I think it will stay volatile for a long period of time for a great number of reasons

you say that is the biggest problem with Bitcoin currently, I have no good udea to answer you, but we can wait and see.

I think that by the end of next year btc will be at a very stable and solid price. Im not expecting it too go up too much and I dont recommend that anyone else does either.

I would actually suggest that the inalterable rate of creation lends some stability to the market. Volatility has and will continue to calm down as it becomes more widespread as a currency instead of an investment tool.