Topic: Isn't speculation and volatility a problem for Bitcoin? - page 4. (Read 425 times)

I don't think it's right to say it's a problem. Everyone knows this and that is precisely what makes you profit. When the price goes down it's a good time to buy the coin and once the market goes up sell the coin. But all things must not be separated from a risk or problem as well as for Bitcoin. When you are deceived by shitcoin it can be one of the risks you have to face. Especially in cryptocurrencies known for their high risk, but behind that all cryptocurrencies can also bring big profits.

Imagine if one day, Bitcoin suddenly becomes less volatile and only moves 1% in a month. Who is going to be trading it anymore except on futures markets and with 100x leverage?

It is a problem as a business currency for retailers especially but anyone who has ever asked for payment in Bitcoin intends to hold on to most of it or as much of it as possible.

Why? Keeping $100 today and Keeping $100 worth of Bitcoin today means you cannot know if it is $100 or $10 in a week but you know in 3 years it will be the same value as what $100 could buy today.

In a way, yes it is a problem.

We have created a "peer-to-peer electronic cash system" and this currency called "bitcoin" works best if it is not extremely volatile. However, we have to be fair and consider that bitcoin is still growing and compared to initial years the volatility has decreased significantly even though we still consider bitcoin volatile.
So in another way it is not a big problem because we consider this phase (which may last another decade or half of it) is the adoption phase and volatility and unpredictable moves is the inherent property of this phase. Eventually the market will grow and stability will dominate it.

P.S. Speculation will always exist regardless of volatility since the price will always move even if it is 0.5% at a time. Not to mention that "bitcoin price" (bitcoin value will be fixed) is determined by how much value the fiat you are comparing with is losing due to inflation.

Yes and no.

Bitcoin’s price relies on the markets around the world for price discovery, and in the markets’ current level/situation/form, Bitcoin is very volatile, but it might become more stable as it grows to multi-trillions in volume.

It's not, that's an indicator that the market is doing well because volatility is directly tied to how many people are selling and how many are buying, speculation is just that, think of it as a misplaced hope or something like that.

Since you have a view on speculation and volatility that means you are learning to trade. Speculation is just the game they play but volatility is the fluctuation of the price. Volatility is a double-edged sword. You can see it as a tool to make money or it could also cause you to lose money depending on which market you trade.

Becoming skillful in trading and speculating the price in Futures Market and you will survive to take advantage whichever the price will go.

It depends on how you're actually looking at Bitcoin. As an investment? It's both a good and bad thing, good thing is you can instantly profit huge amounts depending on your capital if you were able to ride the market wave, but the opposite could also happen. If you're looking at Bitcoin as a currency, then it is indeed something bad, but not to the point that it's close to unusable. After all, there are many instances right now that would show you how some people use Bitcoin to buy stuff. It's mostly regret and whatnot that most people feel really, especially since that big example where someone bought Pizza with Bitcoin way back then, I mean, just imagine how much that amount is today, who wouldn't regret no?

I think like you, but I wouldn't put it that way. Actually, volatility and speculation have been key to Bitcoin being the world's most profitable asset since its birth. Without them it would not have become so famous and would not be hovering around $50k, the price would be much lower.

Another thing is that in theory:


It is normal for volatility to gradually decrease.

It actually depends on how you treat Bitcoin. If you want to start a business which uses Bitcoin as the primary currency, you might see it as a problem. Furthermore, if you want to use Bitcoin as money, it could also be a problem. But if you are using Bitcoin simply as a speculative asset, then volatility is not really a problem. It could be a double-edged sword but it is generally worth appreciating knowing that your goal is to predict the pattern of the rise and fall of its price and make money out of it.

Depends on how you look at it, traders an speculators see it as a positive, volatility can make them money. For long holders, they might frown upon seeing the price swing, they just want to see their portfolio growing.

So still in the middle, nevertheless, I think majority has accepted the fact about Bitcoin's volatility, so it's up to you, better embrace it and not see it as a problem.

I'd argue if the volatility continued in the long run, then yeah it would be a problem, at least if you are looking to use Bitcoin as a currency, or even using it as a reserve. However, the vast majority of new investors are likely in it for the short term, and wanted to cash out into fiat eventually which then volatility could actually be seen as something amazing. 

Stocks, and other investments which are subject to volatility aren't trying to be a currency. If Bitcoin is to operate like a traditional currency, i.e a currency which people use for daily items, transactions, and not just investment then absolutely stability is key to that. So, I would argue that ideally we would like Bitcoin to be different to stocks. Although, the volatility is to be expected, and is to be expected for a little bit longer. Generally, as we get closer to the 21 million Bitcoin out in circulation, volatility should at least drop a little. After all; Bitcoin was sort of designed this way, it's not like volatility is a unexpected side effect, it's actually part of the plan of Bitcoin.

Besides, volatility actually increases adoption in the short term, and those that invest in for the short term, will become familiar with the currency, and potentially adopt it in the long term. Volatility seems to always catch a negative stigma, and while it isn't ideal for a currency, as an investment opportunity it's literally a traders wet dream. I would go out on a limb here, and say that there's no other market which repeatedly gives you the potential to double or triple your investment.

Its not so much volatility most have issues with. Its market uncertainty. Retailers sometimes complain about price shifts which can cut into their bottom line. One reason why there could be a future for a stablecoin for merchants to cut down on price shifts.

Speculation has many different facets to it. Which require time and experience to recognize and comprehend.

Neither volatility or speculation is entirely good or bad. Its important to be accurate on details in financial trading and investment. Oversimplifying the basic fundamentals is usually a recipe for failure.

The volatility is in the nature of bitcoin and that is due to the fact that it is not centralized and not controlled by anyone so selling and buying form different people is creating this volatility and to be honest it is not a bad thing because it constantly keeps the market active and alive, and so as the speculation always whenever a big news about some company adopting it it creates this hype and excitement and incentive for people to buy and so as the bad news, which keep the market active.

expecting too much on it isn't safe, i mean you should build new strategies in order to get the right timing to dump, and also if you already obtain good profits on it just save it because market volatility is so unpredictable wherein even market is fine there's still an unexpected downtrend without any sign. And that's the problem with crypto market and maybe that's what OP trying to say. Lol  isn't safe to be honest unless if your are long term hodler.

problem for bitcoin? definitely not a problem for bitcoin. What attracts people to buy bitcoin is precisely because of the high volatility and speculation. You've probably noticed for yourself how happy people are when the price of bitcoin soars and they walk away with big profits. there are people who keep showing that they had profits of 10X others of 5X so volatility is not a problem, even when bitcoin is used as a payment method it is not a problem. the problem might be if someone received salary in bitcoin

I'm sure the traders who can react to the markets wouldnt necessarily think
the volatility is a problem.

If we dont react at all to the volatility and "zoom out" its not a problem.

The volatility is a result of the decentralisation of Bitcoin, the centralised
traditional markets go into panic if they move more than 2 or 3%.

Experienced Bitcoiners have strong hands and nerves of wrought Iron.

Then should the price of Bitcoin be equivalent to stable coin? If in the end the speculation aims to have a level of hope and also the impetus for investors to make requests?
Meanwhile, the existence of volatility encourages this to make a differentiator for investors to make profits within the specified timeframe. So while the issue of speculation and volatility is the hallmark of Bitcoin's development so far, I don't think the problem is with the level of price stability.

I think it isn´t a problem. Bitcoins volatility is widely known and people who use it already take it into account. Volatility could be a problem if people expect stability from it.

Is it a problem for FOREX or stocks traders? No and yet both have the same traits. Why should the crypto scene be any different?

Quite the contrary in my opinion. If the price or there is no volatility like it is with Bitcoin, do you really think it will be this widely adopted and traded within the few years that it has existed? I believe that this is what makes Bitcoin what is today and like @Yogee said here



People will choose how they see BTC even though I also believe the even the long-term investors still believe in the volatility even if they don't care about it in the short term.