Bitcoin Forum

Lets assume bitcoin makes it through all the barriers and survives the rules and regulations of the governments and yet is decentralized.
It is widely adopted and many people have started to use it. Bitcoin has grown to thousands/millions of dollars in price causing huge volatility.

If there are so many people using it on a daily basis, won't the volatility cause huge fluctuations in it's price ?
If bitcoin has such huge volatility how will it be able to sustain it's price ? The fluctuations in price will cause problems to merchants.
So according to what I think, if there is not a solution to volatility then BTC cannot be used on a regular basis for payments in various places of the world.

Eg: One day I go and check a guitar's price about $100 and then a week later I go to purchase it just to notice that I would have to pay more BTC this time just because of the drop in bitcoin's price.


Conclusions from the comments

Conclusion 1 : More people is not equal to more volatility but more active traders = more volatility
Conclusion 2 : More people involved in bitcoin will mean that the supply of BTC will be well spread among each other and hence volatility will decrease.

Thanks for taking part in the discussion.

These are one of the things would really be experienced once bitcoin is being adopted on a point that the entire population is using it. Volatility is there due to daily transactions and I cant think of
 that 21M would be sufficient to circulate if we do base up the number of users will really be in full extent. Some or most people do like adoption but they didn't able to foreseen on how it would work
if we do come into that point.

Bitcoin started off a tiny piece of plankton being sucked around by currents, maybe now it's a wee rowboat being smacked by the waves, by the time it's everywhere it'll be a supertanker with all the sluggishness that entails.

The more people and money that pour in, the steadier it becomes. One person who tries to initiate a major move will be eaten alive by thousands attempting to capitalise on it. In the great scheme of things volatility has barely wound down, but the potential number of people involved now may only be 1-2% of the future total.

I doubt it'll ever be steady enough for a pure BTC economy if people still have bills and costs to meet in USD, but then again I'm not convinced it'll ever be a currency.

Assuming that each person acts independently, more adoption lowers volatility.

Imagine that a person claps their hands each time they perform an action that affects Bitcoin. If there are 1, or 10, or even 100 people, then you will hear each clap. However, you cannot hear individual claps if there are a million people. You can only hear white noise.

Hi remember bitcoins is based on demand and supply, if more people jump in it'll exceed supply that means prices shall rise as there is more demand but less supply. Now if you believe that with the inclusion of more people selling it'll fluctuate you're wrong, it takes massive coins selling to create a dump and not all can buy one bitcoins, remember when one's selling someone is buying too, so more money is flowing in. In short I don't believe mass adoption will cause fluctuations.

More traders = More volatility so more people doesn't means that it will be highly volatile.We can see two type of volatile in the bitcoin prices which is daily swing and huge bump and dump the traders are the reason why the prices were swinging which is the major problem for the bitcoin to be accepted as currency and the dump and bump were initiated by the whales,if more people adopted to bitcoin then the whales bitcoin will be diluted among the world.

BTC volatility reaches a minimum of three months!

This is the result of some decline in demand and lack of manipulation, but it is not for long.

With long-term investments, the volatility of BTC can be ignored, since such investors are interested in the value trend.

1.19 on Bitcoin Historical Volatility Index on Bitmex. Yesterday, we reached the lowest level from 01/2017 (0.67)...
The interest will come back when Bitcoin'll break its triangle.... Upwards or downwards, but probably not before.

I would agree with other opjnions here, more adoption should steady volatility.
There will always be fluctuations because of human activity related to bitcoin
but as the future plays out huge swings should reduce because of greater population

Hi remember bitcoins is based on demand and supply, if more people jump in it'll exceed supply that means prices shall rise as there is more demand but less supply. Now if you believe that with the inclusion of more people selling it'll fluctuate you're wrong

When you get there, the future of Bitcoin is even more predictable than paper money. You know for sure that Bitcoins emissions are limited, which gives you a guarantee that you will not suffer from inflation. In addition, political instability or economic problems do not have an impact on the level of bitcoin

There are lot of people who have entered into crypto oflate simply because, crypto is really changing the lives of some people. I would say more people in crypto has gone ahead to affect the price of bitcoin. This has made bitcoin more volatile in that, as the population in crypto increases, the demand on bitcoin somewhat increases. The situation of bitcoin is such that, if someone doesn't want, someone else will be available to buy.

I think, maybe the loss is in terms of Volatility. The total value of bitcoin in circulation and the number of businesses that use Bitcoin are still very small compared to what they should be. Therefore, small events, trade, or business activities can significantly affect the price of bitcoin.

It is true. Since the value is very unstable, a person who decides to use bitcoin as a mean of payment must also take a risk and embrace this fact. Actually in the example you’ve cited it is not much a problem to market goods for bitcoin as payment, in my point of view, automatic conversion will do just like in fiat to local currency. This thing will only cause confusion to the costumers so if I will be asked, it still depend on the person if he is willing to take the risk or not.

The volatility issue will automatically get solved once people start to peg things against BTC instead of USD etc. It's not rocket science. So instead of the guitar costing $100, it will cost 100 Satoshis. There won't be any volatility so to speak. But we are very far from something like this to take place. It will take a total economic collapse of sorts to make people realize that banking is a big fraud.

Actually, it is totally the opposite. More users will mean more 'stability'. You basically want to move BTC from whales to the average joe. Once that has happened it will result in a sort of 'volatility-free era', There won't be major price swings as we have experienced or will experience soon in the future.

I think the many stablecoin projects popping up are a result of the volatility issue, and could help to solve that aspect.

Yes, most likely that the way it is. If a lot of people will participate in the cryptocurrency market, and the volume of transactions will increase, then people like Mt. Gox, having thrown 20,000 bitcoins into the market, it would have been very difficult to omit bitcoin in the price. Therefore, with an increase in the number of buyers and sellers in the cryptocurrency market, its price should be more stable. At the same time, I think that with an increase in the cost of Bitcoin, its volatility will also increase, since the amplitude of price fluctuations will allow it.

In my opinion, the problem of high volatility of bitcoin will be solved as soon as a way to limit the ability of whales to rock this boat is invented. Even a massive panic in the market does not have such a negative impact on bitcoin as selling several thousand Bitcoins from one wallet at a time.

At least it got adopted, even more volatily as we know people have their different reason why they adopt bitcoin, for investment or to look on short profit. It is still better than no one adopt bitcoin and make it have no price anymore.

More people does not mean more volatility. It's exactly the opposite. More people mean better distribution and this counteracts volatility.
If you have 100 units of something and 20 belongs to 1 person, 30 to another person and the rest is distributed among 5 other people. If each of these smaller holders sells the price will already move by a lot (10%) and if one of the big holders sell you could have a 30% swing. But what if each person got 1. 1 person selling would only mean a 1% move.

but the problem with bitcoin and altcoins is that there are many people who buy many coins and there are many people who buy few coins each person and this makes a small group own more than 80% of the existing coins. When such institutional investors enter the cryptos market, they will own enormous amounts of coins, they and a very small group that bought many coins to years ago will be the kings


I agree, if nobody were interested in bitcoin, we would have a lot of people complaining, people would complain for any reason

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OP, do not worry too much about it, let the time decide whether bitcoin would become a means of payment or just a good investment.

That's the exact reason why we should say contrariwise, "More people, Less volatility".
 
Being more common & widely distributed would generally mean less centralization which affects price fluctuations.
Just a basic law of economics.

One of the main problems that cause Bitcoin volatility right now is that there are too many of them in the hands of too few people. Large cryptomers that can create massive price fluctuations by selling large quantities.

Indeed, greater populations could provide us great demands also that's why volatility really affects the market behavior. Sell orders wil eventually pull down the buying demand, so we will see fluctuations will always take over. Most cases were really taken over by panic sellers which made the price cheaper.

I think Bitcoin's long term potential is as a store of value. You're right, greater volatility means less utility as a daily-use currency. I could see one of a few coins being used for day-to-day business, and Bitcoin remaining more of an asset in application.

I think that if more people are using btc as a payment system, btc will have a more active circulation thus it will create a more stabilize btc market price in the market. We cannot control volatility as this has been a part of the cryptocurrency eco system either we like it or not,  volatility will continue to occur in the market from time to time.

when we see many people who are interested and using bitcoin every day, the volatility of bitcoin will become faster, and bitcoin volatility is difficult predicted..

and, we will never know the point of stopping bitcoin, because volatility always rises and falls. because of that in the world of trading, I prefer to trade in large exchanges, such as binance and bittrex, the chance of profit and loss is very fast. because many people use it.

in my opinion, what happened is even the opposite, with the existence of crypto and blockchain distribution evenly, the volatile level will decrease, this is the same as what happened at FIAT. if only certain groups use it, it will easily damage market prices

There is one part in your analysis that needs to be corrected
If correct, the picture will be completely clear
If the expected adoption occurred and the number of users increased significantly
  Will make the impact on the price very difficult
  It will require compatibility of large numbers of users
This, of course, is very difficult

in contrast now , some whales can direct the market.

When adoption grows higher, volatility will certainly drop. the much of price volatility at this stage is as a result of huge discrepancies between buyer and sellers. the tide easily swings to one direction because there are fewer player. That will not be the case when there are much persons.The buy-sell order will reach an equilibrium that is difficult to shift in a particular direction, more like a stale mate.

I think that your opinion is correct. that there will always be fluctuations due to activities or actions that humans do related to bitcoin. And that is still fair. As time goes by, let time answer all this.

but not everyone wants to sell their bitcoin
and there will always be a buy wall
don't think about more people more volatility
adoption requires many people to use bitcoin

I think its true that more people will increase the crypto volatility but it doesn't mean volatility is not good because the fact that its the main effect of a decentralized system, having more individuals in crypto world will contribute the movement of the market either to low and high and vice versa, volatility is an opportunity to make us profitable.

volatility is normal in a new technology it will settle its price 5 or 10 years from now i think, but for now volatility is a friend to many like me as a day trader, thats where we maximize our profit the most. :)

This happen when people learn how to work with their investment and study the market well to understand the volatility. More people might cause for stability because some will sell and some gonna buy but the price still remain as it is because the supply is enough. Volatility will remain when there is panic sellers and investors that take chance to buy more.

This is a complex situation, logically with more users we will end up with more stability, so let say you want to sell your btc and it causing the price down, but when a bunch of other people ready to buy the price is going up again, so the volatility can't be avoided but with mass adoption the price will be more stable, and with more stable price hopefully it can be adopted by stores

I doubt that there is a great stability in a cryptocurrency, however, Bitcoin has remained in a band that generated some confidence in comparison with other cryptocurrencies. The fact that more and more people join Bitcoin, I think it will generate more confidence and, therefore, will improve the price of this cryptocurrency. Volatility is inevitable, it is part of the nature of cryptocurrencies.

every investor or person who will start investing by understanding and understanding with all the risks that will be obtained so that investors may be more confident and believe in what we will invest

You have it the wrong way around. The more distributed bitcoins are the less the volatility. Imagine this scenario to explain it :

Let's say, 1000 people own 80% of all the coins and 20% is distributed amongst the rest.. would you think that the 1000 people would be able to cause a lot more volatility when they dump a large amount of bitcoins on the market or when the 20% drop their coins?

When you distribute more bitcoins evenly amongst millions of people, these people own less coins and they do not have the power to manipulate the price.  ;D

I agree, more people more volatility like we can't really know what will the price, when will it grow or decrease. More people means bitcoin will last longer. More people means price will unpredictable and the system will grow.

Having more people in this space does not necessarily mean that volatility will increase too. The market will remain divided into two--seller and buyer-- at any given instant. The buying power is also not the same for everyone.

The way distribution works is that in time some of those big holders will spend their coins. There's no use in holding coins forever. When you spend to buy a house or whatever it is that you need the coins will slowly become spread between many other people. It's a long process but it is a sure and steady one.
You're saying that many people buy few coins. It's true, but with the growth of value 1 coin will become divided between more and more people. There will always be whales but it's better to have that 50% not owned by whales distributed among 10 million people than 1 million.

One thing people don't get and understand about Bitcoin is that, once Bitcoin is been accepted and adopted as a mode of payment and an recognized currency worldwide, its volatility nature will be no more. The Bitcoin system will be somehow stable since a lot of people are using it for their transactions.

I think it is true more people or investor more volatility ,
Because there would be more people in the market more people who could dump or pump the market.

How does more people cause an increase in the volatility of Bitcoin?  More people using Bitcoin will cause and bring some kind of stability to the market value of Bitcoin, the price of Bitcoin is determined by the rate of demand and  supply. With an increase number of people, both the demand and supply rate will increase causing some kinda equilibrium thereby stabilizing the price.

that's what is still being discussed. because of price volatility so it does not have a definite price basis. I think Bitcoin is actually just an example of a decentralized currency. and blockchain is real technology. but because bitcoin is already popular and widely used. then the state acts. the biggest problem now to be received in each country is because of its anonymous characteristics and volatility, so that bitcoin cannot penetrate the global official market. and become real currency.

It´s opposite,more acceptance brings more people who get involved and more people brings more stability to Bitcoin and that means less volatility.Just wait till more banks join this train.

more people is more acceptance and adaptability, only nonsense people = volatility.

Everything have two sided factor , at one side you will find that particular thing have at one side benefits but the same thing at another side leads into some side effect .
Here if will consider that you are going through that thing which have not a better option in the future then how we can consider that you are in favour of cryptocurrency , here you are only showing your thinking to have cryptocurrency in general life and that is not a perfect option to use in general ( in your view ) .
But why you are not thinking at another side , that , one day you bought a guitar and after some days you found that you need to pay more amount of btc that what you paid earlier for the same guitar ( because at one side if price of Bitcoin can fall then at another side pump will also take place that will give lots of opportunities to the holders ) .
So it is a matter of time , here we just need to take attention over the positive and good benefits that we can have with cryptocurrency/Bitcoin .
Otherwise if we will be negative then  what about the haters .

We will survive black Friday, which by the way today, I think we will survive everything else, perhaps even the prerequisites for it were in the previous couple of days, when there were decent fluctuations.

Cryptocurrency have been of great value to traders due to their volatility. Thanks to these jumps get a good profit.

And that is the fun inside crypto currency since you can really profit from that volatility for a short period of time. Crypto wouldn't be profitable in a short time if it is not volatile.

Yes, if bitcoin adopters or users increases to the level global uses there more volatility and fluctuations in price of the market but the volatility/fluctuations in price of bitcoin then will be positively not in the negatively/dump side because there will huge demanding and low supply of bitcoin then since it will be use for daily activities.

Well the more users, the more hands to move the market obviously. Though i wouldn't be too sure that it's for a positive or negative effect since it can be both. New users, weaker hands. Same as how panicky newbies dragged the market down at the start of this year.

I agree with you 100%, I don't want bitcoin to be a regular basis payment either and that's because of fluctuation  but whatever bitcoin is the best.

You're right about the new users been a weak hands and panicking but the tendency of the market to pump in price is higher than dump in price. Concerning this year market as you said, the new users are not t be blame because market manipulation was involved in last market and market correction is a must the following year which is what we are experiencing. Although, panic sell also happened but the cause of the whole scenario was the correction.

I can't agree with you, sorry! Because I think it's opposite. More good People more stable or more high price will happen for Bitcoin. I mentioned good people because we don't need fudder or quick money earner! They are not helpful for the crypto community, Quick or panic sellers are one of the reasons for the Volatility. If experienced and big investors come in the cryptocurrency platform and if they invest here their money and knowledge, I think bitcoin price will be high with stability.

You had a point because more user more transaction made for every minute
In and out transfer of funds have an affect to the bitcoin volatile movements
The reason government want to make rukes and regulations for the entire cryptocurrency
But  mass adoption can help minimize of manipulation because the volume of bitcoin will divided into people

In that case of more volatility due to more people, it's not a big deal if that's the way bitcoin will become outstanding with it profitable aspects of demand. When there's a volatile situation it means people are actively doing trading. This helps the congestion eased and more orders will be sold, in order to bring fort to the circulation of supply towards the blockchain network.

I believe so.High volatility happens especially when there are panic sellers in this crypto world.They are one of the reasons why btc price keeps on dumping instead of pumping its price.I think if there will be mass adoption in the future,the price will always stays on top and will be stable in a peak price.

It works both ways. People love to see panic buyers fomo in at crazy high price levels, but don't like the same people dumping like there is no tomorrow. It's a market at the end of the day. What goes up hard must come down hard.

People here act like current prices are low, but that's not the case at all. The peak of last year shouldn't be used as a benchmark, but ignored because of how fomo demand only lasts for a couple of months at most.

Nope. Supply and demand doesn't work like that, especially not when it comes to something so speculative as crypto currencies. Liquidity on spot exchanges will likely remain poor for ever if exchanges don't change fundamentally.

Whales after so many years of increasing adoption still can't cash out without tanking the price with 5-10% per dump.

 do not think that volatility is a big problem. The market knows more than traders. There is nothing surprising.

I believe otherwise. I think the more people demand for Bitcoin and other cryptocurrencies the higher the volatility. It's with what has happened in the past months where people have been selling and cashing out on the assets, causing the volatility we have witnessed.

Perhaps the problem of bitcoin volatility will be solved someday, but it is not very easy to do it. It was correctly said here that the more traders trading bitcoin the greater its volatility will be. But to manipulate the price it is necessary to have a very large amount. May be when we come to the fact that bitcoin will be used in various fields, but I believe that it should be large-scale areas, because it will be impossible to use bitcoin in conventional grocery stores, for example.

It really depends on the users because we cant deny that the population of bitcoin was continue growing hence we can see that it become more volatile because of those new bitcoin users who always do panic selling especially when the price was falling in the market.

Yes l believe that more people more volatility but volatility now is low volatility.We cant even trade because of low volatility.lt really hard to survive now.We all expect for the high volatility because it brings to everyone a hopetobe rich.

i dont think so. volatility in my opinion is completely unrelated whether it is short term or long term. suppose that all majority of holders apply long-term, this will only make trading volume in the market small