Why Is Bitcoin's Value So Volatile? - page 22.

deisik

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Quote from: CoinsCoinsEverywhere on September 13, 2017, 12:45:42 PM

Quote from: freeyourmind on August 09, 2017, 12:05:33 AM

Since Bitcoin isn't yet adopted in most places, a large part of its supply and demand is based on price speculation. So as the confidence changes, the price fluctuates a lot. As its adoption increases and people send or receive payments for commerce instead of speculating on its price, it should be less volatile.

Even if adoption would help price stability, bitcoin is caught in a paradox. More stability may require more adoption, but more adoption (especially with respect to using it for commerce) will require more stability. It's very hard to use a currency for retail purchases that can change value with respect to fiat by 1% in a minute. Why would I use btc to buy something when there's a significant chance that it could cost a couple percent more by the time I actually complete the purchase?

This is not a paradox

I guess it should rather be called a vicious circle of sorts, where cause and effect depend on each other and intensify each other. In this case, merchants aren't accepting Bitcoin because it is too volatile while it is volatile because its adoption among merchants is too low. But ultimately, the real cause of this self-sustaining loop is low competitiveness of Bitcoin in comparison with fiat currencies. If it could offer something really valuable which fiat monies can't, it would quickly get accepted and its volatility would diminish significantly

lobo13hf

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Quote from: xSkylarx on September 14, 2017, 08:39:35 AM

The value of bitcoin is so volatile because the market is controlled by the whales or the manipulators who have a lot of bitcoin in their wallet and they are all focused in manipulating the market so they can control and make a lot of profit even the market is falling down or not.

they manipulate the market by spreading fud, they can't manipulate it through their money because bitcoin have currently the biggest marketcap in history of cryptocurrency ever, only bill gates could control or manipulate the market of bitcoin.
FUD is the most efficient way and that's way many of them currently spreading.

Reid

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Quote from: xSkylarx on September 14, 2017, 08:39:35 AM

The value of bitcoin is so volatile because the market is controlled by the whales or the manipulators who have a lot of bitcoin in their wallet and they are all focused in manipulating the market so they can control and make a lot of profit even the market is falling down or not.

Considering what happened to the FUD that have been spread, even if they are not whales if a large percentage of the users in those exchanges suddenly withdraw then it could be a big impact with the price and we can see that now. Just a little sh1tty news and everything is changing with the price. That is why I always think that even low amount holders are valuable with the bitcoin price.

xSkylarx

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The value of bitcoin is so volatile because the market is controlled by the whales or the manipulators who have a lot of bitcoin in their wallet and they are all focused in manipulating the market so they can control and make a lot of profit even the market is falling down or not.

CoinsCoinsEverywhere

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Quote from: ModGirl on September 10, 2017, 06:45:32 PM

Quote from: CoinsCoinsEverywhere on September 09, 2017, 02:09:34 AM

Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

As many others have said here, the decentralized nature of the bitcoin is part of the reason for the extreme volatility. There's no centralized entity, like a reserve bank, that can act to dampen the price swings. Traders/speculators that are constantly buying and selling have an impact on the hour-to-hour price. And the general lack of liquidity exacerbates the moves.

But one thing that I think most people are missing here is that there's no good way to determine the actual value of a bitcoin. The value of other currencies is determined by the economies they represent. The value of commodities (oil, gold, etc.) can be estimated from the amount of time/effort/resources/money that's required to obtain them. But bitcoin doesn't have anything like that backing it, so there's no way to form a consensus on what it's value should be. Without that, price is going to continue to swing wildly.

I think it’s natural for any currency either virtual or physical to be volatile because everything in the universe has ups and down. In case of bit coin, volatility is more visible because of increased number investors in it. As people are getting aware of crypto currencies, they have started investing in it to make huge profits in future.

Yes, all financial instruments have ups and downs. But almost nothing has such crazy swings as bitcoin (and other cryptos), unless something catastrophic happens that throws markets into chaos. For most fiat currencies, it's a big deal if they move by 1% in a day. For bitcoin, it's a big deal if it doesn't move by 1% in an hour. Most other financial markets have more investors than bitcoin, but their prices don't fluctuate nearly as much. The volatility here ins't because there are more investors; it's because of the type of investors that are being attracted (i.e., make-a-quick-buck-and-get-out traders).

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Quote from: Granxis on September 03, 2017, 07:58:35 PM

Bitcoin has a high volatility, which is advantageous for traders, there are many reasons for this, for example, when China wakes up, there is a lot of price change, so volatile is high because it is multinational.

Not only traders could take advantages if having high price but to all who have being a part of bitcoin.
Two main reasons why bitcoin so volatile and there is always price fluctuation due to supply and demand in the market. Because a lot of investors and traders are coming but still its supply are limited only that's why bitcoin price still increasing.

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Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

if theres so many people investing here in bitcoin or also promote some campaign here they will going to buy bitcoin that is why bitcoin going high or down(volatile) this is not only the answer because in transaction also here they will going to create a movement to sell and buy thats why its volatile

kidsuzudn

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Bitcoin's Value is volatile because there is a marketcap will decided how valuable bitcoin is, and that marketcap is effected by the investors all over the world, who owns bitcoin, if there is a new that disadvantage for Bitcoin, many investors will sell Bitcoin for real fiat so the price of bitcoin is down. If there is a new that advantage for bitcoin, more people know about bitcoin and they will buy Bitcoin, so the price of Bitcoin is up.

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Quote from: freeyourmind on August 09, 2017, 12:05:33 AM

Since Bitcoin isn't yet adopted in most places, a large part of its supply and demand is based on price speculation. So as the confidence changes, the price fluctuates a lot. As its adoption increases and people send or receive payments for commerce instead of speculating on its price, it should be less volatile.

Even if adoption would help price stability, bitcoin is caught in a paradox. More stability may require more adoption, but more adoption (especially with respect to using it for commerce) will require more stability. It's very hard to use a currency for retail purchases that can change value with respect to fiat by 1% in a minute. Why would I use btc to buy something when there's a significant chance that it could cost a couple percent more by the time I actually complete the purchase?

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Quote from: Sanugarid on September 10, 2017, 09:34:39 AM

Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

It is volatile because it is dependent with its market demand such that if the demand is high, its value be expensive. And since the demand changes from time to time, its market value will also too. But you don't need to hesitate wheether to biy or not because if you have patience you will earn huge profit in the future since Bitcoin is continuously growing in all aspects from its market demand upto its market price.

The price and the value of the bitcoin are so high and volatile. The price of the bitcoin is still not fixing and it is growing so we are expecting a lot of pump and the dumps from the bitcoin. The value of the bitcoin rose to the demand of the market. As it go high and low so the market value decreases and increase at the same time. So buy more bitcoin and don’t be afraid of the loss because you can earn more than invested money and it will provide you a bright future.

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Quote from: 1Referee on September 12, 2017, 05:23:57 PM

Quote from: deisik on September 12, 2017, 10:45:27 AM

You blame the shallow orderbooks, but how many orderbooks of significance has come up recently? I can tell you, basically none. The total majority of bitcoins (if we talk about Bitcoin) are still traded at the top 3-4 exchanges (like Bitfinex, Bithumb, Bittrex and maybe a few others). So it is not about orderbooks as such, it is more about price itself. I've been telling that for years already, i.e. when the price rises high enough (and we seem to be there already), the supply will necessarily run dry. This is sort of a given. But when the supply runs dry, anyone can change it and thus dramatically affect the prices. This is the real cause of runaway volatility

This market lacks liquidity, and that by a huge margin. If the orderbooks were properly filled with legit fiat buy orders, and not orders from pussy bots pulling back everything with the slightest downwards movement, we wouldn't experience current level of volatility. Throughout the years nothing has changed in terms of orderbook liquidity, and that's something that definitely needs to change. At least, back in the days you could dump 100BTC into a $40,000 buy order, where nowadays this same buy order only manages to catch up 10BTC. The higher the price is moving up, the worse this situation will get. That's why a global orderbook is pretty much the best possible solution to tackle this 'problem'. I find it weird that you don't see the importance of how much of an important role orderbooks fill in terms of volatility...

But you don't want to see the real causes of that

You blame the empty orderbooks, but it is like shooting the messenger. Even if you combine all orderbooks into a single huge orderbook, this won't help much in the long run (provided the price continues to rise, of course). With the price rising higher, this global orderbook will necessarily run dry as well in the end. There is simply no other outcome given that the number of coins is more or less fixed (i.e. monetary supply doesn't grow much). Indeed, new coins are still being mined, but they no longer make particular difference and now directly contribute to greater volatility (instead of preventing it). This is what I call a Big Rip theory of Bitcoin and now you seem to implicitly accept it

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Quote from: deisik on September 12, 2017, 10:45:27 AM

You blame the shallow orderbooks, but how many orderbooks of significance has come up recently? I can tell you, basically none. The total majority of bitcoins (if we talk about Bitcoin) are still traded at the top 3-4 exchanges (like Bitfinex, Bithumb, Bittrex and maybe a few others). So it is not about orderbooks as such, it is more about price itself. I've been telling that for years already, i.e. when the price rises high enough (and we seem to be there already), the supply will necessarily run dry. This is sort of a given. But when the supply runs dry, anyone can change it and thus dramatically affect the prices. This is the real cause of runaway volatility

This market lacks liquidity, and that by a huge margin. If the orderbooks were properly filled with legit fiat buy orders, and not orders from pussy bots pulling back everything with the slightest downwards movement, we wouldn't experience current level of volatility. Throughout the years nothing has changed in terms of orderbook liquidity, and that's something that definitely needs to change. At least, back in the days you could dump 100BTC into a $40,000 buy order, where nowadays this same buy order only manages to catch up 10BTC. The higher the price is moving up, the worse this situation will get. That's why a global orderbook is pretty much the best possible solution to tackle this 'problem'. I find it weird that you don't see the importance of how much of an important role orderbooks fill in terms of volatility...

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Quote from: amaral1977 on September 12, 2017, 04:36:36 PM

Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

I think it´s a very young investment with small real life use cases. So being a speculative asset it´s normal to have very big variations in price. That what makes it fun and is atracting so many people:)

Yes an speculative asset that makes people attracts bitcoin. Bitcoin value is volatile because there are many who suppprts bitcoin. Which invested in, continues to buy and sell on bitcoin that makes it volatile. So the demand is increasing in bitcoin.

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Quote from: freeyourmind on August 09, 2017, 12:05:33 AM

Since Bitcoin isn't yet adopted in most places, a large part of its supply and demand is based on price speculation. So as the confidence changes, the price fluctuates a lot. As its adoption increases and people send or receive payments for commerce instead of speculating on its price, it should be less volatile.

Pretty much this exactly, there is such a large proportion of the investment in bitcoin that comes from people speculating on the price that it will always be susceptible to big swings as demand and supply surge due to the overall feel of the market. Any market that sees big gains always sees high volatility.

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Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

I think it´s a very young investment with small real life use cases. So being a speculative asset it´s normal to have very big variations in price. That what makes it fun and is atracting so many people:)

ajmapalo22

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Bitcoin has only limited amount circulating the market as well as number of people and establishment using bitcoin are very small which the price of bitcoin was affected by this factor but in future time when the demand of bitcoin continue to rise its volatility might probably change.

Dmitry.Vastov

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The demand of bitcoin and also the confidence of people make the bitcoin price volatile, if there is FUD created in market then the people will loose their confidence and will start selling their bitcoins.

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Quote from: 1Referee on September 10, 2017, 03:21:14 PM

Quote from: Akash1243 on September 10, 2017, 01:07:47 PM

I think that he reason behind the bitcoins being volatile is the increasing number of investors and people who are taking interest in bitcoins and investing in them.

If we look through all the speculation and stuff, then the extremely poor orderbooks have been the major reason of why the volatility that we experience is this bad/severe/heavy. It's insane that a relatively low number of coins in current days, can get the market to sink with 10% in a matter of seconds - yes, you read that well, seconds. If we would be having one single orderbook, just like stocks are having, we wouldn't experience this level of volatility. Imagine how things will be when the entire world buys and sells through one single orderbook - it will make sure that the volatility that we experience with current severity, will be something of the past. It's practically impossible to force through such regulations to achieve this, but if people are looking for stability, this would be a convenient way of doing it

You obviously don't see the forest for the trees (as always)

You blame the shallow orderbooks, but how many orderbooks of significance has come up recently? I can tell you, basically none. The total majority of bitcoins (if we talk about Bitcoin) are still traded at the top 3-4 exchanges (like Bitfinex, Bithumb, Bittrex and maybe a few others). So it is not about orderbooks as such, it is more about price itself. I've been telling that for years already, i.e. when the price rises high enough (and we seem to be there already), the supply will necessarily run dry. This is sort of a given. But when the supply runs dry, anyone can change it and thus dramatically affect the prices. This is the real cause of runaway volatility

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Quote from: nkarm1 on September 11, 2017, 07:59:19 AM

Quote from: TitanGEL on September 10, 2017, 06:49:47 PM

Quote from: Sanugarid on September 10, 2017, 09:34:39 AM

Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

It is volatile because it is dependent with its market demand such that if the demand is high, its value be expensive. And since the demand changes from time to time, its market value will also too. But you don't need to hesitate wheether to biy or not because if you have patience you will earn huge profit in the future since Bitcoin is continuously growing in all aspects from its market demand upto its market price.

I think you are correct. The reason why the value of the bitcoin is volatile is because the price of the bitcoin is depend on the demand of the people. The demand of the people nowadays to the bitcoin is so high and it is the reason why the bitcoin today is expensive.

Generally this is the reason of the volality, but the demand of the users is technically affected by many factors. First as we have experienced, the factor of the news events exaggerated by the media like geopolitical events and announcement by the government. This is the main factor right now why the price is not comportable with its current price right now. Or other news like security breach can also affect the "demand". With all these fear, minority or majority of the user's might sell out their their coins which can give "more supply" available in the market added those btc that are freshly mined. So the price will go down. And after the price goes down, this is the time where majority of the traders will buy until they made the supply low. Then they will take profits so a sell out will happened. And that it the cycle on why bitcoin is so volatile. Cheesy

. This also happens to gold but it is not that volatile because it has been established for a thousand years. This is what happens to Bitcoin right now, as years passed by "according to studies" the volatility of bitcoin is reducing.

That is about the same theory I have: there are too many emotions in bitcoin.
Emotions need time to cool off, but bitcoin knows no breaks. The exchanges are online ever!
That is creating a lot of pressure, especially to unexperienced holders.
They see a trend, get the feeling that they have to do something, and make very often the wrong choice.

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Quote from: TitanGEL on September 10, 2017, 06:49:47 PM

Quote from: Sanugarid on September 10, 2017, 09:34:39 AM

Quote from: rortan75 on August 06, 2017, 04:45:39 AM

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

It is volatile because it is dependent with its market demand such that if the demand is high, its value be expensive. And since the demand changes from time to time, its market value will also too. But you don't need to hesitate wheether to biy or not because if you have patience you will earn huge profit in the future since Bitcoin is continuously growing in all aspects from its market demand upto its market price.

I think you are correct. The reason why the value of the bitcoin is volatile is because the price of the bitcoin is depend on the demand of the people. The demand of the people nowadays to the bitcoin is so high and it is the reason why the bitcoin today is expensive.

Generally this is the reason of the volality, but the demand of the users is technically affected by many factors. First as we have experienced, the factor of the news events exaggerated by the media like geopolitical events and announcement by the government. This is the main factor right now why the price is not comportable with its current price right now. Or other news like security breach can also affect the "demand". With all these fear, minority or majority of the user's might sell out their their coins which can give "more supply" available in the market added those btc that are freshly mined. So the price will go down. And after the price goes down, this is the time where majority of the traders will buy until they made the supply low. Then they will take profits so a sell out will happened. And that it the cycle on why bitcoin is so volatile. Cheesy

. This also happens to gold but it is not that volatile because it has been established for a thousand years. This is what happens to Bitcoin right now, as years passed by "according to studies" the volatility of bitcoin is reducing.

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