Bitcoin Forum

Economy => Economics => Topic started by: zoolander on May 04, 2013, 12:56:25 PM

Title: Measures/Indicators of Volatility for Bitcoin?
Post by: zoolander on May 04, 2013, 12:56:25 PM
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 ( and the more intuitive Modigliani–Modigliani measure ( 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.

Title: Re: Measures/Indicators of Volatility for Bitcoin?
Post by: BTConomist on May 04, 2013, 06:46:02 PM

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.