Bitcoin Forum

Hi All,

I've been wondering if there is any good indicators or some kind of measurement/index that gives an indication of how volatile the price of a commodity/stock/currency is based on some period of time other than basic statistical calculations.

I came across things like Sharpe ratio (http://en.wikipedia.org/wiki/Sharpe_ratio) and the more intuitive Modigliani–Modigliani measure (http://en.wikipedia.org/wiki/Modigliani_risk-adjusted_performance) which look at the reward-to-variability ratio, which I think might be interesting to look at for Bitcoin.

I'm fairly ignorant of such financial indicators and formulae - so I guess I'm interested in whether anyone out there is looking at such things and whether they are appropriate in regards to Bitcoin.

Thanks in advance for any replies.

All you need to account for is that the current book value of a freshly-mined bitcoin is less than $3 a pop (an average cost of mining a single bitcoin). And just like you wouldn't pay more than $1 to own a dollar, it makes no sense to pay more than 1BTC to own a bitcoin. Trying to measure BTC's volatility is useless at this point since current USD/BTC exchange rate fluctuations are the result of various pump and dump schemes, which get executed whenever their administrators find themselves in the mood for some fun and/or profit. Nevertheless, feel free to try predicting mood swings of those administrators, that is if you know who they are.