Is it really a benefit that nobody controls the price? - page 4.

harizen

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

I like crypto but, as a merchant and business owner, price volatility keeps me from accepting it. The price is heavily influenced by hype and FUD and I can't afford to lose half my wealth from a random crash.

You don't need to hold those coins in the first place. You can accept crypto on your business by using a third-party program's API that will instantly convert those cryptos into fiat and that will save you from your worries of being in a crash.

There is no solution to Bitcoin's volatility as long as most people considered it as an investment more than a currency.

We are the one who needs to adjust instead of the market that will adjust for us.

isaac_clarke22

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Quote from: Sinjokubhi on February 25, 2021, 08:56:05 AM

Quote from: DoublerHunter on February 18, 2021, 03:16:39 PM

~

Yups, the Bitcoin price will not continue to be stable. It is true what he said. Because the ups and downs of a currency must have certain causes. There is no way, the price of that currency will become stable. Maybe for a few days you can, but on the next day there will definitely be something that causes the price to decrease, whether it's from an economic or political situation it can cause the Bitcoin price to either slowly decline or immediately drop far from its usual price. Vice versa, this situation can also make currency prices improve and soar up, even exceeding the usual price. The price of crypto is basically influenced by its demand and availability in the market.

As an example :

The demand for bitcoin in the market is on the rise, but the availability of sellers is not able to meet the demands of buyers in the market. Thus, the price of bitcoin goes up, because demand is higher than availability. Likewise, when the market wants to melt bitcoin into cash and its availability floods the market. Thus, the price of bitcoins will fall, as there are more sales than purchases.

It's quite crazy actually. Seems like OP isn't used to the volatility that the market shows lately.
I got used already to Bitcoin's instability and I've been trading it for quite 3 years already and it doesn't seem to make me quit not even a flinch just yet. Cheesy

The demand you mentioned seems like due to many mentions to it to the media lately.

AakZaki

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Quote from: lixer on February 28, 2021, 03:54:59 AM

~snip~
A trader smart enough to use these opportunities can arbitrage.

You're right, I almost forgot to do this. Luckily I have a good friend to remind me of this. So seeking profit through trading is not only through the process of buying cheap and selling expensive in one market, there are many other techniques such as arbitase. Several times I have done this and it works. An important note to remember is to carry out precise calculations regarding transaction speeds, fees, and the state of origin and destination wallets.

lixer

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Quote from: noormcs5 on February 21, 2021, 02:23:19 PM

Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

Here's how the market would react.
1. If the price of a coin is lower on other exchanges, traders will buy from them and sell on this, right? That will cause the price on those exchanges to rise.

2. If the price is higher on other exchanges, traders will buy from this exchange to sell on those, right? That will cause the price on those exchanges to fall.

This means the market will keep correcting itself until all prices are closely pegged to the prices on this exchange.

This is called arbitrage trading where you buy a coin which is low in any exchange and sell it on the other exchange where it is high. Normally this opportunity does not happen often as price remains similar among all exchanges but if this happens, you can take advantage of it.

This happens a lot more in the local market like I was recently reading somewhere that in Nigeria the price of BTC is being traded at a high premium and up-to 20-30% above the market price which allows this kind of arbitrage opportunity if one can arrange BTC at normal price and just sell it to the ones buying at premium.

I have seen sometimes when a bull run is going on, prices on localbitcoins have a huge difference between selling and buying which indicates that more people want to buy right now and similarly when a drop happens there are more sellers and less buyers. A trader smart enough to use these opportunities can arbitrage.

skarais

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OP, you should know that bitcoin is a decentralized cryptocurrency. This is unlike most other currencies which can be controlled by the authorities or the government. We have bitcoin to remove centralization from the nature of its common currency. If you are bothered by the volatility of bitcoin price, then you are not advised to accept it as a means of payment for the business you are developing.

You may be one of those people who find it difficult to adopt bitcoin as a mean of payment because of its volatility, but there is nothing to worry about because this is your choice. If you don't like volatility, then use stablecoin as a mean of payment.

CryptopreneurBrainboss

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

I like crypto but, as a merchant and business owner, price volatility keeps me from accepting it. The price is heavily influenced by hype and FUD and I can't afford to lose half my wealth from a random crash.

Hope you do understand it's a two way thing, you can also make twice the profit you would had made from accepting just fiats with bitcoin. If you doubt you can ask Elon, he made more holding bitcoin with in days than what he made in the previous month selling cars. Also you can as well use third party service providers that automatically convert bitcoin into fiats if you're that scared of the volatility and what to contribute to the adoption of the currency.

The decentralized nature of bitcoin is what make it unique, any features that make it centralized will remove that. Traders and merchants can protect themselves against loss by taking advantage of the numerous stablecoin available in the market. When you feel the price for s likely to drop, you exchange your coins to stablecoin and buy back when the market is about to recover or you feel comfortable buying.

MWesterweele

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Quote from: ChrisPop on February 21, 2021, 02:48:35 PM

Quote from: DoublerHunter on February 18, 2021, 03:16:39 PM

Nope, Bitcoin price does not fluctuate because of a big number of people trading back and forth between altcoins and BTC. Bitcoin is so volatile because it is a pretty new asset class and investors are not accustomed to. They don't know how to evaluate it so the price moves mainly due to speculation. Nowadays we see big companies like Tesla and Microstrategy hoarding BTC as a hedge against fiat and for capital appreciation. This trend could change the violent moves of BTC especially on the downside.

Another factor is the low liquidity in the markets. Institutions with deep pockets cannot get their hands on BTC yet, but only with very low amounts that do not impact their yearly performance significantly. That's why you see investment funds like Blackrock only "dabbling" with Bitcoin - because they don't want the market to get in a buying frenzy, at least not yet.

Let's not forget the law that plays the market of bitcoin or even in any kind of business in real life the "law of supply and demand". We are so delighted that we becoming a huge number of traders but on the other hand, the more that we increase in number especially the new joiner to our number are whales who can afford to avail as much bitcoin as they want, expect that the market value may vary accordingly. Bitcoin were made in a limited amount, and if the supply of bitcoin in the market has shortage it will definitely give an increase variation of market value and otherwise to the abundant supply of bitcoin.

AakZaki

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Quote from: noormcs5 on February 21, 2021, 02:23:19 PM

This is called arbitrage trading where you buy a coin which is low in any exchange and sell it on the other exchange where it is high. Normally this opportunity does not happen often as price remains similar among all exchanges but if this happens, you can take advantage of it.

if we analyze every coin on another exchange maybe arbitrase is possible to happen. I usually find some altcoins that have price differences which then I use to seek some benefits from the price difference. However, what must also be considered is the volume and fees that will be charged on these transactions. many Arbitration communities discuss what coins have good potential.

fullhdpixel

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

If even one crypto exchange in the world adopted a policy to limit the prices of buy and sell orders to within a small percentage of the daily opening price, say +/- 1% for example, volatility would disappear. Bitcoin is currently priced around $50k, this would limit Bitcoin volatility to no more or less than $500 a day.

Here's how the market would react.
1. If the price of a coin is lower on other exchanges, traders will buy from them and sell on this, right? That will cause the price on those exchanges to rise.

2. If the price is higher on other exchanges, traders will buy from this exchange to sell on those, right? That will cause the price on those exchanges to fall.

This means the market will keep correcting itself until all prices are closely pegged to the prices on this exchange.

I am not sure if what you like you have said here will be possible or not, but being stable is something I don’t think is going to happen when it comes to Bitcoin. And that aside, I think any exchange that is going to follow the process you have here will be losing for that reason since they are limiting traders from what they can buy and sell and most traders won’t be ready for that.

It may favor you as a merchant, that’s if the price can become quite stable as you wished, but traders wouldn’t agree, what that volatility means to them is the possibility of more profit. Maybe you should only accept crypto payment whenever you think you can.

wxa7115

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Bitcoin is GOD

Quote from: SquallLeonhart on February 21, 2021, 02:20:49 PM

There is no reason to accept bitcoin if you are afraid of the volatility as well, nobody forces you to accept it. If you do not want it just don't put bitcoin as a payment option, if you think by not putting bitcoin as payment option you are missing out on too much you could just turn it into stablecoin like tygeade said, there are 100 different methods of just not being afraid of the volatility.

However by holding bitcoin you are mostly making a profit, almost all people who ever received bitcoin made a profit today, you could have bought bitcoin at any given time in the past 11 years and you would be in profit today, just because it falls some days doesn't mean you should sell, and if you need the money to pay something then you should not be risking your money in trading or investment this way anyhow, you should be accepting money in form that you need it.

In fact he can accept all the bitcoin that he wants since there are payment processors that will convert whatever bitcoin that you received into fiat immediately, which to me seems like a better solution for people like him that do not want to deal with bitcoin's volatility than what he's proposing, which is basically a total denial of the nature of bitcoin and its purpose.

Also I would like to say that reading this thread I'm happy that the majority of the members of this forum do not agree with his proposal, having any type of price controls will never work in this market, and by the way it will never work in any market either and that has been demonstrated time and time again throughout all history.

Sinjokubhi

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Sinjokubhi

Quote from: DoublerHunter on February 18, 2021, 03:16:39 PM

^ You did not probably fully understand what is the function of BTC and how affects the price to become volatile.
Because BTC has a fixed amount and the price varied on the demand and supply in the market cap. Once the demand will increase, it means the supply becomes less which in turn to BTC becomes expensive and the price was pegged into a dollar-based value. Nevertheless, it is impossible that you mean BTC will become stable in price, the price will always be fluctuated due to massive traders of altcoins in BTC pairs.

Yups, the Bitcoin price will not continue to be stable. It is true what he said. Because the ups and downs of a currency must have certain causes. There is no way, the price of that currency will become stable. Maybe for a few days you can, but on the next day there will definitely be something that causes the price to decrease, whether it's from an economic or political situation it can cause the Bitcoin price to either slowly decline or immediately drop far from its usual price. Vice versa, this situation can also make currency prices improve and soar up, even exceeding the usual price. The price of crypto is basically influenced by its demand and availability in the market.

As an example :

The demand for bitcoin in the market is on the rise, but the availability of sellers is not able to meet the demands of buyers in the market. Thus, the price of bitcoin goes up, because demand is higher than availability. Likewise, when the market wants to melt bitcoin into cash and its availability floods the market. Thus, the price of bitcoins will fall, as there are more sales than purchases.

isaac_clarke22

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

~

Just do it and accept it. Even my biller accepts crypto payments now through a third-party app though I wish I could pay upfront with just using a Bitcoin wallet. That's my cue to buy hardware wallet as well.
There are indeed a lot of FUDs in crypto, because business needed to destroy other in order to survive and don't let put you down.

bitgolden

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Quote from: qwertyup23 on February 22, 2021, 05:48:05 AM

I think you are forgetting one crucial factor on what drives the price of cryptocurrencies in the market- the law of supply and demand.

With its limited supply circulating in the market, the price is highly dependent upon the supply/demand of the coin. Obviously, if majority of the supply is owned by a single individual, he can manipulate the market by purchasing/selling depending on what he needs.

The beauty about its volatility, is that, it can be perfect for short/long-term investments but you really have to know the other factors also in order to achieve maximum efficiency and profit.

Unfortunately rich people do own the majority of the crypto market, and also the fiat world as well, the difference is that in the crypto world when an individual tries to make a move, they make others richer or poorer with them, and nobody gains all alone, because if I keep my bitcoins, if a whale makes it go super high I make money thanks to them as well, if they lose money I lose money as well, in fiat world things are not like that, rich people make money even while people are literally starving to death.

So supply and demand is one of the biggest reasons why bitcoin goes up or down, but also this freedom to be equals no matter who owns what does make it go up as well because it makes it used more. Sure that could be included in the supply and demand as well but it is too important to be included in something else and should be pointed out.

qwertyup23

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

I think you are forgetting one crucial factor on what drives the price of cryptocurrencies in the market- the law of supply and demand.

With its limited supply circulating in the market, the price is highly dependent upon the supply/demand of the coin. Obviously, if majority of the supply is owned by a single individual, he can manipulate the market by purchasing/selling depending on what he needs.

The beauty about its volatility, is that, it can be perfect for short/long-term investments but you really have to know the other factors also in order to achieve maximum efficiency and profit.

Julien_Olynpic

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There are many exchanges that restrict the setting of limit orders too high or too low from the current price. I think that's enough. If you limit the fluctuations in daily prices, then traders will simply switch to other exchanges where there are no such restrictions. In the end, this exchange itself, which restricts price movements for the day, will either close or cancel all restrictions. In general, these restrictions are meaningless. This is not a traditional market where everything is regulated. This is the Wild West. This is even a cryptanarchy.

lixer

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Quote from: doctor877 on February 21, 2021, 05:10:49 PM

This has been there since the trading on exchanges has started and with the model of cryptocurrency, it will keep happening in such way. Price will never be achieved so that everyone will have a free hand in the market based on how good you are at trading or investing.

Yes, as others have said as well, demand and supply is the reason behind the price volatility and the demand and supply are never going into any kind of equilibrium situation so the volatility will remain always. There are times when the demand is higher as people want to invest into crypto so the market price goes higher and similarly when people want to sell their coins but there ain't the buyers on that price, the market drops as the sellers have to sell at a lower price.

Not sure why the volatility bothers anyone since the introduction of stable coins was made only to bring stability in the market and let bitcoins be bought and sold as assets and stable coins as a currency for payment.

doctor877

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This has been there since the trading on exchanges has started and with the model of cryptocurrency, it will keep happening in such way. Price will never be achieved so that everyone will have a free hand in the market based on how good you are at trading or investing.

ChrisPop

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Not your Keys, Not your Bitcoins

Quote from: DoublerHunter on February 18, 2021, 03:16:39 PM

^ You did not probably fully understand what is the function of BTC and how affects the price to become volatile.
Because BTC has a fixed amount and the price varied on the demand and supply in the market cap. Once the demand will increase, it means the supply becomes less which in turn to BTC becomes expensive and the price was pegged into a dollar-based value. Nevertheless, it is impossible that you mean BTC will become stable in price, the price will always be fluctuated due to massive traders of altcoins in BTC pairs.

Nope, Bitcoin price does not fluctuate because of a big number of people trading back and forth between altcoins and BTC. Bitcoin is so volatile because it is a pretty new asset class and investors are not accustomed to. They don't know how to evaluate it so the price moves mainly due to speculation. Nowadays we see big companies like Tesla and Microstrategy hoarding BTC as a hedge against fiat and for capital appreciation. This trend could change the violent moves of BTC especially on the downside.

Another factor is the low liquidity in the markets. Institutions with deep pockets cannot get their hands on BTC yet, but only with very low amounts that do not impact their yearly performance significantly. That's why you see investment funds like Blackrock only "dabbling" with Bitcoin - because they don't want the market to get in a buying frenzy, at least not yet.

noormcs5

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Quote from: SapphireSpire on February 18, 2021, 03:07:53 PM

Here's how the market would react.
1. If the price of a coin is lower on other exchanges, traders will buy from them and sell on this, right? That will cause the price on those exchanges to rise.

2. If the price is higher on other exchanges, traders will buy from this exchange to sell on those, right? That will cause the price on those exchanges to fall.

This means the market will keep correcting itself until all prices are closely pegged to the prices on this exchange.

This is called arbitrage trading where you buy a coin which is low in any exchange and sell it on the other exchange where it is high. Normally this opportunity does not happen often as price remains similar among all exchanges but if this happens, you can take advantage of it.

SquallLeonhart

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There is no reason to accept bitcoin if you are afraid of the volatility as well, nobody forces you to accept it. If you do not want it just don't put bitcoin as a payment option, if you think by not putting bitcoin as payment option you are missing out on too much you could just turn it into stablecoin like tygeade said, there are 100 different methods of just not being afraid of the volatility.

However by holding bitcoin you are mostly making a profit, almost all people who ever received bitcoin made a profit today, you could have bought bitcoin at any given time in the past 11 years and you would be in profit today, just because it falls some days doesn't mean you should sell, and if you need the money to pay something then you should not be risking your money in trading or investment this way anyhow, you should be accepting money in form that you need it.

Topic: Is it really a benefit that nobody controls the price? - page 4. (Read 997 times)