Looking at Bitcoin Volatility Over the Years - The Bitcoin ...
(PDF) Volatility Analysis of Bitcoin Price Time Series
Bitcoin Price Volatility Drops to its Lowest Level of the ...
Decentralized Monetary System
Rya is a crypto designed to function as a stable, scalable and decentralized medium of exchange. By using a smart money supply solution based on p2p loans, the price of money will always be appropriate for the state of the economy.
My thoughts on Bitcoin's value, volatility, and proposition to newcomers in the space. (In accessible/digestible language)
IMO, the concept of bitcoin is still very "scary”, misunderstood, and difficult to approach for many newcomers. Learning about and understanding bitcoin for the first time can be very cumbersome and technical. I wrote this in an attempt to share my thoughts about bitcoin; To dispel/ease peoples notions of skepticism. and also to spark people’s curiosity to explore a more fundamental understanding to the question, "why is bitcoin valuable?" If anyone wants to share, copy, edit, add, or critique… I encourage all discussion.
Bitcoin is secure money with a finite supply. Price increase and volatility is simply a function of supply, demand, and deflation. My suspicion is that the price will "fully mature" when the total supply of bitcoin is mined, and at that point, most of the global population has "converted" some or all of their monetary wealth into bitcoin. (That is year 2140, so very far from now). IMO, bitcoins network security and decentralization are the primary benchmarks truly needed for its continued success. Scaling will be improved along the way. So, granted that the bitcoin protocol/network remains secure and decentralized, then bitcoin will continue to become more valuable over time until it reaches full maturity. Once maturity is reached, bitcoin's value/purchasing power will become "stable" and will no longer be seen as a speculative investment that will "yield returns". At that time, bitcoin will simply be seen as secure money without inflation. Scaling solutions for bitcoin will have already been well figured out and implemented. If bitcoins security is breached, then the entire value proposition of bitcoin becomes worthless. If that ever happens, perhaps a different coin with "greater security" will take over bitcoins role and seize its "destiny" as a global reserve currency. Final thoughts: Assuming bitcoin remains secure, be grateful to be an early adopter to the most ultimate "investment opportunity" the world has ever seen. We are still very early on the scale of things. If Bitcoin stabilizes in price, that will take place in/around year 2140. Volatility will continue to exist, but volatility will also become much less severe as bitcoin reaches closer and closer to its maturity point. My suggestion to anyone reading this. Buy some bitcoin now. Buy only what you are comfortable losing, because nothing in life is guaranteed. However, if bitcoin survives, any amount you purchase today will be tremendously more valuable in the future. Small sums of money invested today will be life changing in the future. Don’t even think of selling your bitcoin for at least a decade, because at that point in time, you will realize that you won’t have to. Bitcoin will have become the global standard reserve currency. Trade at your own risk.
Is there ever a time when the value of cryptocurrencies like Bitcoin will stabilize and become less volatile?
I've been analyzing the graph of prices of currencies like Bitcoin, Ethereum and Nano and I noticed a certain thing in common: the price of these cryptocurrencies is too volatile. In certain periods, a unit of these currencies may rise at exorbitant prices and then fall dramatically. These moments can make it difficult to adopt these coins in daily use for one reason: imagine if the money you used to buy 1 kg of food could buy 2 kg of food tomorrow. You would be reluctant to buy anything. The same would happen with companies. How can you calculate costs and profit issues if there is no long-term value stability? If you happen to disagree with my opinion and believe that it needs adjustments, show me the way and point out my mistakes. I love being corrected in such cases.
Why Bitcoin’s Value is Volatile in the real-time world?
Planning to start investing in the crypto space? Then to have a piece of deep knowledge about the volatility, its causes and impacts are mandatory. A better understanding of the concepts that impact greatly on your investments would be helpful either to give a boost for your profits or safeguard from any possible loss. Volatility, […]
Price fluctuations in the bitcoin spot rate on cryptocurrency exchanges are driven by many factors. Volatility is measured in traditional markets by the Volatility Index, also known as the CBOE Volatility Index (VIX). More recently, a volatility index for bitcoin has also become available. Known as the Bitcoin Volatility Index, it aims to track the volatility of the world's leading digital currency by market cap over various periods of time. Bitcoin's value has been historically quite volatile. In a three-month span from October of 2017 to January of 2018, for instance, the volatility of the price of bitcoin reached to nearly 8%. This is more than twice the volatility of bitcoin in the 30-day period ending January 15, 2020. But why is bitcoin so volatile? Here are just a few of the many factors behind bitcoin's volatility.
Bad News Hurts Adoption Rate
News events that scare bitcoin users include geopolitical events and statements by governments that bitcoin is likely to be regulated. Bitcoin's early adopters included several bad actors, producing headline news stories that produced fear in investors. Headline-making bitcoin news over the decade or so of the cryptocurrency's existence includes the bankruptcy of Mt. Gox in early 2014 and, more recently, that of the South Korean exchange Yapian Youbit. Other news stories which shocked investors include the high-profile use of bitcoin in drug transactions via Silk Road that ended with the FBI shutdown of the marketplace in October 2013. All these incidents and the public panic that ensued drove the value of bitcoins versus fiat currencies down rapidly. However, bitcoin-friendly investors viewed those events as evidence that the market was maturing, driving the value of bitcoins versus the dollar markedly back up in the short period immediately following the news events.
Bitcoin's Perceived Value Sways
One reason why bitcoin may fluctuate against fiat currencies is the perceived store of value versus the fiat currency. Bitcoin has properties that make it similar to gold. It is governed by a design decision by the developers of the core technology to limit its production to a fixed quantity of 21 million BTC. Since that differs markedly from fiat currency, which is dynamically managed by governments who want to maintain low inflation, high employment, and satisfactory growth through investment in capital resources, as economies built with fiat currencies show signs of strength or weakness, investors may allocate more or less of their assets into bitcoin.
Uncertainty of Future Bitcoin's Value
Bitcoin volatility is also driven in large part by varying perceptions of the intrinsic value of the cryptocurrency as a store of value and method of value transfer. A store of value is the function by which an asset can be useful in the future with some predictability. A store of value can be saved and exchanged for some good or service in the future. A method of value transfer is any object or concept used to transmit property in the form of assets from one party to another. Bitcoin’s volatility at the present makes it a somewhat unclear store of value, but it promises nearly frictionless value transfer. As a result, we see that bitcoin's value can swing based on news events much as we observe with fiat currencies.
Large Currency Holder Risks
Bitcoin volatility is also to an extent driven by holders of large proportions of the total outstanding float of the currency. For bitcoin investors with current holdings above around $10M, it is not clear how they would liquidate a position that large into a fiat position without severely moving the market. Indeed, it may not be clear how they would liquidate a position of that size in a short period of time at all, as most cryptocurrency exchanges impose 24-hour withdrawal limits far below that threshold. Bitcoin has not reached the mass market adoption rates that would be necessary to provide option value to large holders of the currency.
Security Breaches Cause Volatility
Bitcoin can also become volatile when the bitcoin community exposes security vulnerabilities in an effort to produce massive open source responses in the form of security fixes. This approach to security is paradoxically one that produces great outcomes, with many valuable open source software initiatives to its credit, including Linux. Bitcoin developers must reveal security concerns to the public in order to produce robust solutions. It was a hack that drove the Yapian Youbit to bankruptcy, while many other cryptocurrencies have also made headlines for being hacked or having stashes of cryptocurrencies stolen. As an early example, in April 2014, the OpenSSL vulnerabilities attacked by the Heartbleed bug and reported by Google security's, Neel Mehta, drove Bitcoin prices down by 10% in a month. Bitcoin and open source software development are built upon the same fundamental premise that a copy of the source code is available to users to examine. This concept makes it the responsibility of the community to voice concerns about the software design, just as it is the responsibility of the community to come to consensus about modifications to that underlying source code as well. Because of the open conversation and debate regarding the Bitcoin network, security breaches tend to be highly publicized.
High-Profile Losses Raise Fear
It is worth noting that the aforementioned thefts and the ensuing news about the losses had a double effect on volatility. They reduced the overall float of bitcoin, producing a potential lift on the value of the remaining bitcoin due to increased scarcity. However, overriding this lift was the negative effect of the news cycle that followed. Notably, other bitcoin gateways looked to the massive failure at Mt. Gox as a positive for the long term prospects of bitcoin, further complicating the already complex story behind the currency’s volatility. As early adopting firms were eliminated from the market due to poor management and dysfunctional processes, later entrants learn from their errors and build stronger processes into their own operations, strengthening the infrastructure of the cryptocurrency overall.
High-Inflation Nations and Bitcoins
Bitcoin’s use case as a currency for developing countries that are currently experiencing high inflation is valuable when considering the volatility of bitcoin in these economies versus the volatility of bitcoin in USD. Bitcoin is much more volatile versus USD than the high-inflation Argentine peso versus the USD. That being said, the near frictionless transfer of bitcoins across borders makes it a potentially highly attractive borrowing instrument for Argentineans, as the high inflation rate for peso-denominated loans potentially justifies taking on some intermediate currency volatility risk in a bitcoin-denominated loan funded outside Argentina. Similarly, funders outside Argentina can earn a higher return under this scheme than they can by using other debt instruments, denominated in their home currency, potentially offsetting some of the risks of exposure to the high inflation Argentine market.
Tax Treatment Lifts Volatility
According to the Internal Revenue Service (IRS), bitcoin is actually considered an asset for tax purposes. This has had a mixed impact on bitcoin's volatility. On the upside, any statement recognizing the currency has a positive effect on the market valuation of the currency. Conversely, the decision by the IRS to call it property had at least two negative effects. The first was the added complexity for users who want to use it as a form of payment. Under the new tax law, users would have to record the market value of the currency at the time of every transaction, no matter how small. This need for record keeping can understandably slow adoption as it seems to be too much trouble for what it is worth for many users. Secondly, the decision to call the currency a form of property for tax purposes may be a signal to some market participants that the IRS is preparing to enforce stronger regulations later. Very strong regulation of the currency could cause the adoption rate of the currency to slow to the point where it is not able to achieve the mass adoption that is critical for its overall utility in society. Recent moves by the IRS are not clear as to their signaling motives and therefore have mixed signals to the market for bitcoin.
08-31 08:15 - 'Seriously, do these people have someone's hand up their ass puppeting them? OP we all have BTC, most of us because we think its neat and it'll go up in value where we can dump it. Its way too fucking volatile to use withou...' by /u/Claimintru removed from /r/Bitcoin within 603-613min
''' Seriously, do these people have someone's hand up their ass puppeting them? OP we all have BTC, most of us because we think its neat and it'll go up in value where we can dump it. Its way too fucking volatile to use without some serious regret when the very next day it moons another couple thousand dollars. Actual currency is still well and good ''' Context Link Go1dfish undelete link unreddit undelete link Author: Claimintru
Donald J. Trump:"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity...."
you can give a lot of tags to Bitcoin, a volatile mess, fringe currency, not a store of value, among others. A Ponzi scheme is certainly not one of these negative labels that a critic can throw at Bitcoin.
QuietGrowth maintains that investing in bitcoin is measured speculation. Bitcoin is yet to prove to be a dependable store of value. ~35% drop in value during current market volatility due to corona virus outbreak isn't helping the case of bitcoin.
Why is it that every few years the mining reward "halves" wouldn't it have been less of a dramatic impact on the bitcoin ecosystem if the reward was programmed to gradually decrease with each block. The timing could be the same so that at the time Satoshi wanted the reward to be at 12.5 BTC , it would still be at 12.5BTC with the gradual system, and similarly for each original halving "mark" the gradual system could meet the same schedule. The new gradual system would just do away with the crazy idea of abrupt "halving" which really throws some unnecessary volatility into the equation. Why wasn't this gradual system programed? Did Satoshi, and the others want to keep Bitcoin's value volatile? EDIT: I would be curious to know if there are any alt-coins out there that implement a gradual decline of miner rewards.
Donald J. Trump is a moron:"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity...."
Bitcoin Cash is just as much of a store of value as Bitcoin (BTC). (They’re actually both quite volatile speaking from a store-of-value point of view). BCH has the added utility that it can be used as cash with low fees. BTC (intentionally) dropped that feature to its own detriment.
@realDonaldTrump: I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....
Trump: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” - Someone has to remind him that the fiat money are not based on gold standard anymore.
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