First for the bitcoin to become stable, support from not just from the people but also from the government will likely happen. nations might start thinking of putting cryptocurrencies as a part of the financial system. banks might also adopt to their system. A stable cryptocurrency can bring a lot of opportunities and convenience to people not just today but also into the future.
I agree with you o this point, if we want to see the less volatile of cryptocurrency then we have to take a measure to ensure that Bitcoin will have a stable price, but the solution is very much difficult because the capital market is totally dependent on the Bitcoin holders. if the government has a backup to this system then Bitcoin would be more safe and credible to the people. because of they only belief on the traditional institution.
Topic: What must happen so that cryptocurrencies are less volatile? - page 2. (Read 2691 times)
First for the bitcoin to become stable, support from not just from the people but also from the government will likely happen. nations might start thinking of putting cryptocurrencies as a part of the financial system. banks might also adopt to their system. A stable cryptocurrency can bring a lot of opportunities and convenience to people not just today but also into the future.
September 28, 2017, 06:47:56 AM
What would it take?
Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
The volatility / wild price movement of bitcoin will be less frequently happen if bitcoin has high liquidity. There is a relation between volatility reduction and huge mass adoption, most of bitcoin users are trader so if they do panic selling the price will down but if bitcoin get huge mass adoption, it will be harder to influence the price of bitcoin by panic selling or panic buying. Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
September 28, 2017, 05:44:07 AM
Bitcoin presents a variety of opportunities that did not exist prior to its development. Yet, it has failed as yet to convert investors concerned about its potential rate of adoption as an alternative currency. Recent acknowledgement by the IRS that Bitcoin is an asset for tax purposes has clarified the situation for investors, and the promise of frictionless value transfer suggests innovative use cases in foreign direct investment. In the near term, much of the volatility will be driven by investor perception of the ability of gateways to safeguard individual holdings and provide for a reliable store of value as adoption increases.
Price fluctuations in the Bitcoin spot rate on the Bitcoin exchanges is driven by many factors. Volatility is measured in traditional markets by the Volatility Index, also known as the CBOE Volatility Index (VIX). Volatility in Bitcoin does not yet have a generally accepted index since cryptocurrency as an asset class is still in its nascent stages, but we do know that Bitcoin is capable of volatility in the form of 10x changes in price versus the U.S. dollar, in a relatively short period of time (See the Investopedia Bitcoin Center for current updates on the price of bitcoin).
Price fluctuations in the Bitcoin spot rate on the Bitcoin exchanges is driven by many factors. Volatility is measured in traditional markets by the Volatility Index, also known as the CBOE Volatility Index (VIX). Volatility in Bitcoin does not yet have a generally accepted index since cryptocurrency as an asset class is still in its nascent stages, but we do know that Bitcoin is capable of volatility in the form of 10x changes in price versus the U.S. dollar, in a relatively short period of time (See the Investopedia Bitcoin Center for current updates on the price of bitcoin).
Volatility is a complex phenomenon, the OP, @hello_good_sir, @Kakmakr and @Zikadis rised valid points already: lacking acceptance as a "currency" and the general speculative nature are the main "drivers" of the boom-bust cycles that make Bitcoin volatile.
I want to focus on one point: Fear. There is a widespread assumption that Bitcoin can either be the "currency of the future" or a total "failure". That's why when the price goes down a bit, panics are common. I think if we (as a community) could guarantee, at least, price stability for one single day (in normal conditions, e.g. not during an attack or after a bug being discovered) that would be a huge step forward. So people can sleep well and aren't incentived to sell in the wrong moment. Because that's what market manipulation is about: generate fear or FOMO.
My preferred solution is a mechanism for merchants to guarantee stable prices, designed in a way that lets them profit from it with higher sales.
I want to focus on one point: Fear. There is a widespread assumption that Bitcoin can either be the "currency of the future" or a total "failure". That's why when the price goes down a bit, panics are common. I think if we (as a community) could guarantee, at least, price stability for one single day (in normal conditions, e.g. not during an attack or after a bug being discovered) that would be a huge step forward. So people can sleep well and aren't incentived to sell in the wrong moment. Because that's what market manipulation is about: generate fear or FOMO.
My preferred solution is a mechanism for merchants to guarantee stable prices, designed in a way that lets them profit from it with higher sales.
I think it depends on coins, waves and ethereum is very crowded in trading, in bittrex can even reach thousands of btc. A major factor because too many altcoins might confuse users.
ETH and waves are providing different types of things than bitcoin like they are providing multiple exchanges as well where dollars and bitcoin can be also store that's why while bitcoin don't need these option why would bitcoin keep these option as well because bitcoin is already on top 1 which can be in other currency but bitcoin will never allow other currency inside bitcoin. 
Not so difficult to answer that question. What these cryptos really need is real usage. At the moment the biggest use case for most of them is pure speculation
Yes and no, when a coin gets real world usage that most of the time only generates even more speculation about its price, it is not rare, that after an announcement from the developers of a coin of a new feature, for the price to go up like crazy in a short amount of time.
Not so difficult to answer that question. What these cryptos really need is real usage. At the moment the biggest use case for most of them is pure speculation
It is not possible yet because market is growing day by day and the supply and demand are also changing according to it. The price will become less volatile when market will become stable, means that the supply and demand will change in a gradual manner.
I agree we cant stop cryptocurrency volatility because its natural in the world of crypto .We may see only a stable currency if it has no volume or not traded frequently that happens in the most shitcoins currency.
What would it take?
Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
This would be depend on the bitcoin users, Because we all know here there are users buying bitcoin to have a source of income and some are for investment assets in a long term then once it reach the peak amount of value they will sell it. And because of that things the volatility has become change it can be in a minutes, an hour, day, or weeks something like that.Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
What would it take?
Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
This would be depend on the bitcoin users, Because we all know here there are users buying bitcoin to have a source of income and some are for investment assets in a long term then once it reach the peak amount of value they will sell it. And because of that things the volatility has become change it can be in a minutes, an hour, day, or weeks something like that.Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
Relying on individuals using bitcoin to achieve stability will take forever without even achieving it be ahse humans will always trade for profit to the extent of even trading currencies through the Forex market but those currencies to a large extent enjoys some level of stability but they still trade with it to achieve more profit not to talk of bitcoin whose volatility cannot be predicted. So, stability for now is not achievable.
It is not possible yet because market is growing day by day and the supply and demand are also changing according to it. The price will become less volatile when market will become stable, means that the supply and demand will change in a gradual manner.
I agree we cant stop cryptocurrency volatility because its natural in the world of crypto .We may see only a stable currency if it has no volume or not traded frequently that happens in the most shitcoins currency.What would it take?
Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
This would be depend on the bitcoin users, Because we all know here there are users buying bitcoin to have a source of income and some are for investment assets in a long term then once it reach the peak amount of value they will sell it. And because of that things the volatility has become change it can be in a minutes, an hour, day, or weeks something like that. Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
It is not possible yet because market is growing day by day and the supply and demand are also changing according to it. The price will become less volatile when market will become stable, means that the supply and demand will change in a gradual manner.
I agree we cant stop cryptocurrency volatility because its natural in the world of crypto .We may see only a stable currency if it has no volume or not traded frequently that happens in the most shitcoins currency. ALL THE CENTRAL BANKS AROUND THE WORLD STOP ISSUING FIAT AND KEEP SUPPLY STATIC FOR FIVE YEARS STRAIGHT.
if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
That is never going to happen, if they maintain the price of fiat static then that means the fiat will become slightly more valuable over time, how are they going to steal from you without you realizing it, if they raise the taxes you will notice and everyone hates paying higher taxes that is why they like to tax with the inflation tax.if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
ALL THE CENTRAL BANKS AROUND THE WORLD STOP ISSUING FIAT AND KEEP SUPPLY STATIC FOR FIVE YEARS STRAIGHT.
if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
That is never going to happen, if they maintain the price of fiat static then that means the fiat will become slightly more valuable over time, how are they going to steal from you without you realizing it, if they raise the taxes you will notice and everyone hates paying higher taxes that is why they like to tax with the inflation tax.if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
ALL THE CENTRAL BANKS AROUND THE WORLD STOP ISSUING FIAT AND KEEP SUPPLY STATIC FOR FIVE YEARS STRAIGHT.
if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
That is never going to happen, if they maintain the price of fiat static then that means the fiat will become slightly more valuable over time, how are they going to steal from you without you realizing it, if they raise the taxes you will notice and everyone hates paying higher taxes that is why they like to tax with the inflation tax. if fiat stabilizes for many years globally, then prices of everything else will stabilize. If not, then the central banks are playing money games and acts of war.
These games have been constantly played by central banks and they never cease to stop - pitfall of humanity.
...atleast (the sound) cryptocurrencies offers an option outside of this evil system.
It is not possible yet because market is growing day by day and the supply and demand are also changing according to it. The price will become less volatile when market will become stable, means that the supply and demand will change in a gradual manner.
I always think about the Maize farmer story I have been told when I was young. We had a very rich maize farmer in our country and he started with 1 farm. He was very successful and consequently bought more farms in the surrounding area. In the beginning the price of maize was determined by the supply of say 5000 farmers in the district, but as this successful farmer bought other farmers land, the number of farmers in the district decreased.
His 5 sons started to farm and they also started buying land in the district, until they owned almost all farms. Now they were in a position to manipulate the supply of maize to the market. They could plant less maize to hike up the price or hold back the maize in Silos.
This is happening with Bitcoin now, some Bitcoin whales < early adopters > are owning the majority of the coins. So they can manipulate the price, based on the demand and how they supply or hoard coins. < The same thing are being done with other commodities like Oil >
The solution will be to increase adoption to put coins into other people's wallets. The more coins are distributed to more people, the less opportunity there will be for whales to manipulate the exchanges. ^smile^
Great story but you are correct, the whales are very powerful but even them must have a limit at some point the price of bitcoin is going to be so attractive that they will being to sell a part of their stash and with that more people will be able to adopt bitcoin and as time passes the volatility is going to not be nearly as big. His 5 sons started to farm and they also started buying land in the district, until they owned almost all farms. Now they were in a position to manipulate the supply of maize to the market. They could plant less maize to hike up the price or hold back the maize in Silos.
This is happening with Bitcoin now, some Bitcoin whales < early adopters > are owning the majority of the coins. So they can manipulate the price, based on the demand and how they supply or hoard coins. < The same thing are being done with other commodities like Oil >
The solution will be to increase adoption to put coins into other people's wallets. The more coins are distributed to more people, the less opportunity there will be for whales to manipulate the exchanges. ^smile^
What would it take?
Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
It will be less volatile if there'll be more participants or if there will be more people who will use, invest and be more interested to cryptocurrency. I think volatility takes place because the market's demand is not that high. If more people will engage in crytocurrency, the demand will increase that will make the value highly stable or maybe continuously increasing. It will avoid dumps to happen. Does the volatility settle if certain amount of merchants accept payments in crypto? Or should there be more people that would get paid in crypto? OR should there be a cryptoeconomy where people and businesses get income in crypto and spent the crypto?
Furthermore, could the volatility be even solved? I mean of more and more people are getting into Bitcoin, when would such demand cycle cool down?
I would like to know the economics behind it.
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