Traders becoming something more common definitely changes the price, but holders change the price a lot more in quicker fashion. So, what volatility shows here is that if there are more traders, we get to see a lot more swings daily but to lower level, like maybe 10% and under for trader world if they became bigger power.
However when holders are bigger, they do not make daily swings because they do not buy or sell daily constantly, they do it in bulk and that is why when there is a big holder that ends up buying huge amount or selling a huge amount, the swing is much bigger and have like 50%+ affect in long term just like we had in past one month, but it is less common and happens a lot more rarely. Hence, they both have volatility but different ways.
Topic: Volatility determined by percentage of traders vs hodlers? - page 2. (Read 269 times)
Basically, the traders do cause the Bitcoin volatility more than the Holders in my honest opinion, becasue if everyone hold some of their holdings right now; mean that, there are going to be less volatility in the market. There are problems arising from those traders whom have huge Bitcoin for trades sometimes those with huge amount constitute major challenge in the market.
The volatility might be determine by percentage of traders vs holders, but the price of bitcoin is certainly built up by the demand and the supply. Of course the price of bitcoin will be more stable if the number of traders decreases. We might observe a more healthy uptrend which only has slight corrections. But the price of any asset by the demand and the supply. And right now, demand of bitcoin is higher than supply which makes the price of bitcoin increases rapidly in the past few days
The market contains numerous variables. Each variable is anyone who involves in this market. With technical analysis, we can observe a bigger picture which help us to make a right decision when making an order. So I think there is no reason to care about the percentage of traders vs holders?
The market contains numerous variables. Each variable is anyone who involves in this market. With technical analysis, we can observe a bigger picture which help us to make a right decision when making an order. So I think there is no reason to care about the percentage of traders vs holders?
Obviously, bitcoin volatility causes by traders, if there are 90% holders and only 10% of traders, assume everyone only possesses BTC1 then the price should be stable.
I think this could be misleading. More holders don't necessarily mean Bitcoin will be more stable. If the buy/sell volume is not balanced or the depth is shallow then it might as well more volatile then ever. 
Volatility in my opinion heavily depends on how large the market volume itself. You can have a crypto with 90% of holders if the volume in the market is kinda low it's vulnerable to market manipulation or even huge pump and dump. Traders themselves are not the major factor that make the price swing but other factor like demands, rumour that could affect selling or buying activities and many more. But, the highest the market volume, the more money needed to make market swing. It's not like the amount of traders and holders not giving any impact at all to the market its just not really the major factor playing here.
I'd make it simpler and make the relationship only by the amount of Bitcoin the traders have. The number of traders is not so much relevant.
And it's hard to quantify, since I expect that many traders may have amounts (bigger than 1 BTC!) kept in exchanges' cold wallets for more than one year.
And it's hard to quantify, since I expect that many traders may have amounts (bigger than 1 BTC!) kept in exchanges' cold wallets for more than one year.
You just make it complicated. Let's make it simple then.
Will those number of traders/holders affect the btc volatility?
Ofcourse, the more they hold and sell the bitcoin the more it affects the price. Remember that the price of btc always depends on yhe "supply and demand". So if that holders (whales for example) sell off huge amount of bitcoin, btc price will plummet. Same goes with the percentage of traders but there are actually many reasons for the price volatility of bitcoin. Like for example, news events, legal matters, etc.
Will those number of traders/holders affect the btc volatility?
Ofcourse, the more they hold and sell the bitcoin the more it affects the price. Remember that the price of btc always depends on yhe "supply and demand". So if that holders (whales for example) sell off huge amount of bitcoin, btc price will plummet. Same goes with the percentage of traders but there are actually many reasons for the price volatility of bitcoin. Like for example, news events, legal matters, etc.
Obviously, bitcoin volatility causes by traders, if there are 90% holders and only 10% of traders, assume everyone only possesses BTC1 then the price should be stable.
The key is how many bitcoins each person has, the more one has, the more likely the price will swing in short terms.
Considering the amount of bitcoin in the circulating supply and the amount left to mine, then price stability is far from being a reality.
The key is how many bitcoins each person has, the more one has, the more likely the price will swing in short terms.
Considering the amount of bitcoin in the circulating supply and the amount left to mine, then price stability is far from being a reality.
Good understanding about volatility. But the main reason for volatility is the demand of bitcoin. Whether there are more holders or traders as long as the demand is changing, there will be a volatility. We will never know if the time comes that there will be more holders than traders. Value could raise by that time and demand could be higher because there will be a less in the circulation if everyone holds. I think it will even make the price higher and nothing will change with its volatility.
Hi,
I saw a statistic online, that currently lists the percentage of hodler of bitcoin (holding 1+ years) vs number of traders who hold btc 1 month or less. Currently there are 64.99% hodlers of bitcoin vs %35.01 of traders. My question is, does an increase in percentage of traders increase the magnitude of price swings? If say the percentage of hodlers of bitcoin stabilizes in the future to 90%, will the magnitude of short term price swings also decrease? In other words does volatility decrease as percentage of hodlers increases? Is that why "bluechip stocks" are less volatile? because a large percentage of the investors are holding?
I saw a statistic online, that currently lists the percentage of hodler of bitcoin (holding 1+ years) vs number of traders who hold btc 1 month or less. Currently there are 64.99% hodlers of bitcoin vs %35.01 of traders. My question is, does an increase in percentage of traders increase the magnitude of price swings? If say the percentage of hodlers of bitcoin stabilizes in the future to 90%, will the magnitude of short term price swings also decrease? In other words does volatility decrease as percentage of hodlers increases? Is that why "bluechip stocks" are less volatile? because a large percentage of the investors are holding?
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