Bitcoin Forum

One major obstacle toward Bitcoin's acceptance by the mainstream is its extreme volatility. Effectively, this volatility means that Bitcoin is more a commodity than a currency.

That being the case, if, and that's a big 'IF', we wish to further the cause of Bitcoin as a currency with mainstream acceptance, there needs must be a mechanism in place to 'dampen' the volatility.

Central Banks stabilise their International fiat currencies through some exchange rate mechanism, that prevents excessive volatility. Can a similar mechanism operate for Bitcoin?

But, who will be in charge of a setup that is not just intentionally decentralised, it is explicitly anti-centralised?!

Are these just the design limitations of Bitcoin that we have to put up with; or can Bitcoin evolve?


 

It's hard to see Bitcoin having a stable price until all coins are mined. With the supply and demand and circulation changing it's not easy or impossible to have a stable price for bitcoin. Sometime we've seen wallets , exchanges and certain ICO's put a average price for Bitcoin or ethereum to exchange  other than that any tokens price will be on rapid changes when they traded in the market.

Until all BTC are mined it will still be volatile. Best shot we have to see how a stable price for a crypto currency would work is check out the price change of a token or coin that's already fully pumped to the market. until that happens this advantage and disadvantage is here to stay.

I think that no, it's still a small market, and very manipulative

No in our life time. The closer we get to the coins being mined completely the more stable in theory it should get.

You had it exactly right within your first sentence. Bitcoin will continue to be volatile and unpredictable until all coins have been mined. So basically what we are saying it that within your life time you won't see a stable and predictable Bitcoin.

The only way we're going to get a stable price is from people not using it as an investment tool, and a day trading tool. But that's not going to happen until we fall down substantially, so who knows if that's going to happen. We would have to push for crypto as a currency, and we'd have to make the news for our acceptance and real life usage instead of price increases.

Get people and businesses interested in crypto the currency, and not the investment

You might be right but this would also have negative effects on the currency and adoption. For it to be successful and reach mainstream as some people are looking for it to do it would require investment and trading. If everyone held Bitcoin it just wouldn't work as there's not much demand. It no longer becomes a currency but an investment to sell on later if there's no daily trading of it.

Bitcoins and cryptos volatility cannot be curbed.
The simple reason is its because of the unregulated and decentralised
nature of it. Markets can be manipulated and traders are in a frenzy to
gain as much as possible as quick as possible. Its going to be very
difficult to counteract these facts.

I'm not advocating for investing and trading to go away all together, I'm just saying that I would much rather see investing and trading only make up 1-5 percent of our volume instead of most of our volume and the other is volume in BTC is going to simply be people using the coin itself as intended, as a currency.

We are pretty much a trading coin right now, we aspire to be a world currency.

Bitcoin volatility is already in decline.

https://media.coindesk.com/uploads/2017/01/Volatility-728x435.png
Source: https://www.coindesk.com/bitcoin-where-wall-street-and-silicon-valley-meet/This chart is old,but it does the job.

Also, we are in about 3 months on the range 7-9k. This is low volatility for bitcoin. E até getting there.

Bitcoin will definitely remain as an extremely volatile cryto forever because without its volatility there isn't anything going to happen for other cryptos and the traders who want some huge profits will not be interested in it anymore. Calling Bitcoin a commodity isn't very fair and it isn't as stable as fiat. The price of Bitcoin has had major surges during these years and the expectations of having such ups and down are still high even today.


Well, there isn't any mechanism or stabilizer to  normalize the volatility of Bitcoin and I am very sure that there won't be anyone ever because if that happens then that would reduce its usage rather than increasing it. The main reason for its market is the volatility and only because of which the investors are earning huge profits compare to any other commodity or stocks or currencies. And, the main things is that the Bitcoin is not operated by any bank or any country and that's why there can be no-one operator of it.

Since bitcoin is decentralized, it is supply and demand that causes these fluctuations/volatility.
The price is now stable due to the stability of supply and demand or in other words the lack of hot news that drives investments a lot.
I do not think that the number of bitcoins "all coins mined" will make a big difference in stability, but perhaps the big whales can influence the price.

---

The stable price does not necessarily mean centralization, check Havven (https://havven.io/).

When you say something is volatile it means that it evaporates at a normal temperature and if BITCOIN is described to be volatile it then means  that it is absolutely out of control like any other volatile substance this is a simple logic.
However if the volatility must be nipped in the bud BITCOIN must under both technological and structural adjustment.

Not at the moment and not in our lifetime. 

Th volatility of bitcoin can not be controlled as long as it is still being mined.

This volatility has made many people millionaires and at the same time ruined some people's lives who bought at the top. Until btc price stabilizes, I don't think we will get new average Joe's money come into the market. Too many people have gotten burned.

Setting up a mechanism for the sole purpose of controlling Bitcoin's volatility would make it already just like any other fiat currency under the control of centralized power...that is exactly what Bitcoin is avoiding to happen. In my own opinion, by the time that Bitcoin has already reached the mainstream population the volatility will eventually subsides but the problem is that to get there into the mainstream many think that volatility is the big hindrance...so it can be the case of the chicken and the egg. As to what can be the best solution for this hindrance without affecting its decentralized nature is something that is open for discussion or even a debate.

I believe that bitcoin's volatility can be reduced by regulating the crypto-currency sphere. However, I am against the fact that cryptos are regulated by the state. I believe that every participant in the crypto sphere should ensure its worthy development. Instead of waiting for governments to take action that hinders the development of digital currencies, the participants themselves must make efforts to create proper regulatory control over new innovative financial technologies.

volatility is definitely one of the obstacles in front of bitcoin for being adopted but I disagree with calling it the biggest one because this volatility can also mean you can have a bigger buying power as the time goes by. for example when you buy bitcoin at $1000 and in a year it goes to $8000 now you have 8 times the buying power than you had last year so you use it as a currency even spending the profit would be more than enough!

volatility has nothing to do with the design though. it is all about the adoption! it is a weird relationship actually. the more adoption will decrease the volatility but at the same time the current volatility is preventing the adoption. in any case the market needs to grow more for price to become more stable and also exchanges have to stop sucking so that they can grow more so a little dump doesn't cause a big drop!

Honestly speaking, bitcoin volatility isn't something that I'm particularl concerned about at all. I hear people talking about bitcoin volatility as a really serious issue all the time, but personally, I've never had problems with bitcoin fluctuating in the short term.

All it means is that bitcoin is decentralized, and is a free floating currency independent from anything else - that's actually something positive from one perspective. Also, just because bitcoin is volatile in the short run doesn't mean that it's not a store of value over the long term, which it is, and is much better at than government issued currencies.

The introduction of a central entity to control volatility of BTC would make no sense whatsoever. Nor will it ever happen. Bitcoin's speculative volatility will drop as time goes on, and more people adopt bitcoin as a form of payment. It's that simple, really. And it's not even a problem at this stage to worry about.

fiat markets curb the volatility by having huge amounts of funds on order lines made up of many traders per price point. and also the traders are not hoarding for weeks to make sudden 10-100% profits. but instead making daily/hourly minimal percent profits which actually add up to the same long term profit. but without the wait//risk.

if people started trading knowing that its less risky to wait for 50% spikes every few months.. but instead take 1% a day. they would still get their 50% evry few months, but will less risk, stress and without causing as much volatility required

I guess all is possible in our world, but will it be good for the bitcoin and the market itself!!?? this is the main question!
and I think the answer is a NO. No, the market will not tolerate this, cause flat market leaves no opportunity to earn money!

The volatility of bitcoin cannot be curbed due to its unregulated and decentralized nature of it.

Bitcoin  is sure evolving, but the volatility will sure take a while, as there is no regulation in the space,until there is a strict regulation the volatility is sure to be a for of limitation to BTC acceptance.

yes it is possible to be curbed by implementing proper rules and policy of btc. Even it would be possible is all the countries accept bitcoin and make it legal in the world economy.

While there is no way to limit the volatility of bitcoin. Apparently, there will not be such a mechanism. How it is possible to regulate supply and demand for bitcoin. if bitcoin does not have any centralized controls? Therefore, if bitcoin's volatility can not be reduced, then in the future the situation will deteriorate due to the possible increase in the rate of bitcoin. I think that if bitcoin rises very high in price, then its volatility will only increase, as the amplitude of its price fluctuations can and will increase. It can end badly for him.

Cryptocurrency is a speculative market and that is the nature. Bitcoin is a volatile market and curbing it will be like going against the nature and fundamental of bitcoin. The volatility is what make profit in bitcoin market. For bitcoin to be stable will make it to lose one of its major characteristics.

I mean, I don't see a reason why bitcoin can't thrive while being volatile. Volatility is something subjective. You may perceive fiat as being stable, but in fact, in the long term, fiat currencies all inevitably go to zero.

And to me, I'd rather hold bitcoin, which may be volatile in the short run, than fiat.

It would be redundant to have bitcoin at all if there was a central bank manipulating the supply and demand of bitcoin, since that is what bitcoin is built to combat in the first place.

I think that as markets mature, and bitcoin's use as a method of payment between traders outweighs the speculative parts of it, it'll become naturally less volatile. That's that simple.

I believe that Bitcoin’s volatility will decrease as it gains more acceptance. It is still a speculative investment for many people so it’s going to fluctuate as short term investors cash out to lock in gains. At some point, more investors will hold for the long term which will make the price more stable. Let’s remember that Bitcoin has only been around for about 10 years.

To make it less fluctuate bitcoin need to be mass adopted and maybe bitcoin need only to be spend as currency, not as investment, the main reason of the high swing is because people do big buying or big selling at once and it disrupted the supply and demand, but as long as it is valuable people will always take profit from bitcoin

For me, it is very difficult to curb the volatility of Bitcoin because when bitcoin reaches its potential market cap, the price will stabilise and be more in tune with other indices such as inflation.

Maybe it will not happen because the bitcoin will gradually overcome as the price in the market will still grow and it will be accepted. May un the coming years the BTC's price will be stable. Many will still used the BTC for it will help us for our daily needs.

Bitcoin is very volatile because it is not yet reach a massive adoption. Once it is already reach a massive adoption the price of bitcoin will stabilize. Volatility in currency is normal, you are just not use to it because we are born where the currency have a regulation in terms of currency volatility. But in old days volatility of currency is normal.

it can't be becaise the volatily is driven by uncertainty and absence of a state that assures bitcoins value.

Volatility is a normal condition in currency moreover cryptocurrency space.
Yes, i know if central bank can make a pressure on the volatility the currency. But why we do that? for make anti-decentralized in bitcoin?
maybe the volatility is good for us right now, it's making us to strong, we have a lot of time to make Bitcoin better for all people and government. It’s just the time, you know if many Government right now doing to make regulation the cryptocurrency (Bitcoin), this is a way to go legal and so press the volatility.

I do not think that the number of bitcoins "all coins mined" will make a big difference in stability, but perhaps the big whales can influence the price.

We would have to push for crypto as a currency, and we'd have to make the news for our acceptance and real life usage instead of price increases.

Not easy to do and the volatility in nature of crypto currency is the fear of some people not investing in Bitcoin as they see it as ponzi scheme.... Its only government that can reduce the volatility by making it legal and accepted by all.

For the volatility of bitcoin to be checked, most people joining bitcoin markets and trading have to understand the true value of bitcoin. People join through FOMO and sell at lower prices than they bought because of FUDs. Also, holders who owe significant amount of bitcoin have a role to play. But most of the big holders would always want more. When you let your coins slide, they'll gladly hold it. It's almost impossible to curb volatility since the power is in the hands of every individual holder of bitcoin. Perhaps it may be possible to control volatility when we all start thinking the same suddenly.

It's the nature of Bitcoin and altcoins to be volatile, so anytime their value changes ang we can't just stop it or slow its changes since every people's transaction to Bitcoin it will move the price as well.

It is quite possible although it is a very long shot. Looking at the prices over the past three months, it is obvious that the volatility has decreased significantly but then, it is Bitcoin,right? You never can predict accurately what might happen next

I do not yet know a way to reduce the volatility of bitcoin prices and it seems to me that it will be very difficult to do because bitcoin is decentralized, also bitcoin is used now as a tool for investing and reducing the volatility of bitcoin prices will lead to a decrease in investment interest.

Sometimes i don't want to give too much of a hope when there is not any. The volatility of bitcoin cannot be curbed because the primary reason for which bitcoin was created has been thrown away and know people have implemented their own reasons for personal gains. Bitcoins were supposed to be a mode of payment for transactions but not holding it like an asset which has a specific value against time. It is so funny that we the crypto enthusiasts who are wishing so bad for the legalization of bitcoin will not agree to dumping it, because people would lose huge sum of money but i must be honest i don't see any other way out aside dumping the coin.

Volatility measures the variance of the price of a certain financial instrument within a certain period of time. It is commonly associated with the risk level of the instrument, a highly volatile instrument is regarded as risky and a less volatile instrument as less risky.

Therefore, it is important to understand the volatility of bitcoin and other cryptocurrencies if you are looking to invest or trade in the cryptocurrency space.

Here are the most important take-aways of the bitcoin volatility analysis based on our data:

Bitcoin weekly volatility reached up to 60% per annum during the previous year (Figure1), but other coin pairs saw even bigger swings. Bitcoin is definitely the most liquid coin, its order books show the deepest sell and buy offers, therefore a big trade will have a smaller price impact, hence a smaller price volatility. Bitcoin is, however, still more volatile than any fiat currency pairs.

When comparing Bitcoin trading versus fiat currencies, we observe that BTC versus CNY is the most volatile market (Figure2). This is mainly due to the previously zero trading fees on Chinese exchanges that bumped up volume.

Bitcoin volatility can be traded

we can't change it because that is how we traders earn always think that even bitcoin drops there a big opportunity to earn, for me volatility is a good thing also.
see further details here https://www.cryptocompare.com/coins/guides/5-things-you-need-to-know-about-bitcoin-volatility/

Volatility is one of the main feature of bitcoin which is used by traders to gain huge profits and it could not be controlled as it is a decentralised currency.

I don't think they're design limitations rather they're what the hodlers/traders/users have turned Bitcoin into. Maybe in the long run, Bitcoin price will achieve stability.

People love Bitcoin because of its decentralization and with decentralization the volatility couldn't be avoided, and there is no way to control the volatility, because most of the people used Bitcoin as investment, and there are tons of traders active every day, it's makes the volatility even worse

Things that tend to dampen volatility are widespread adoption and use, lots of volume on exchanges so price doesn't move very quickly, and intrinsic value.

Bitcoin has some serious challenges for widespread adoption, and its decentralized, leaderless nature pretty much guarantees those challenges will not be effectively addressed for the time being.

A centralized exchange rate mechanism would pretty much defeat the purpose of decentralized peer to peer transactions, so I wouldn't recommend it, and I don't think it would work anyway.

I don't see Bitcoin evolving in a way that could curb the volatility, though it might be dampened somewhat by significantly more speculators getting into the game.

For an example of a cryptocurrency that is proactively addressing these challenges with Bitcoin and gearing up for widespread global adoption, take a look at DNotes and its sister company DNotes Global. The project is not widely known at this point, has been operating largely under the radar, but over the past four years it has been very steadily and quietly building up and putting together the pieces, and one day, probably in the next couple years, it's going to take the world by storm. All of a sudden, there will be a digital currency that seamlessly bridges the gap between cryptocurrency and traditional financial structures, that is totally user-friendly and intuitive to use, and which is supported by an extensive ecosytem to give it intrinsic value. You don't build something like that overnight, but for most people it will appear like the proverbial overnight success.

I very much agree
Bitcoin's price will gradually stabilize as it is tapped
Because bitcoin is lost again, when some wallets are forgotten, the bitcoin inside disappears.

indeed, volatility is the main characteristic of cryptocurrency. I dont know well what makes crypto so volatile but it is not always bad.
i think there is no guarantee bitcoin's volatility will be gone if it going to be centralized. Bitcoin and crypto should be stay decentralized.

Actually volatility of bitcoin is natural. Only thanks to it we can make profit and earn money quickly. If you like stable fluctuating you can just trade in forex for example. But personally I like such volatility, because it provide us opportunities to buy cheap and sell in high.

In my opinion, the fluctuation of bitcoin is not necessarily limited by the fact that it fluctuates much, it is just showing the trader and interacting, thanks to the fluctuation that I have embarked on bitcoin.

One of the major strengths Bitcoin has is it's freedom. The fact that it can operate freely without external influences and intervention is what makes it attractive, foe the volatile status to be eliminated, there must be some sort of control on how BTC operates which will greatly affect it's freedom. The volatile nature can be curbed only if BTC is centralized, something that i sot see happening anytime soon especially with most governments battling BTC so much so that some are doing away with it completely

Should limit the fluctuation of Bitcoin, giving users more losses, and greater profitability

it will definitely decrease

Until btc price stabilizes, I don't think we will get new average Joe's money come into the market

It is limited by the support and resistance, it can not be limited, so the player can control it.

There is a possibility that bitcoin's high volatility rate could be curbed or stabilized, however, it is not possible for the existing progress the technoligy had now. We can't use something as creating a physical represetntation of bitcoin sin e it would destroy the integruty of the coin and moreso it is very expensive shpuld we plan to do it. Also, if bitcoin would stabiliae now, it wouldn't be suitable for investing anymore.

No way.Volatility of bitcoin could not be solved.

Agree, bitcoin price is very unstable and we cannot really tell what will happen to it in the coming months, price falls and price rises unexpectedly. this is the reason why so many people are into bitcoin now though price cannot really give assurance of sure profit.

Crypto is affected by both internal and external factors. External factors like economic factors affecting a dominant crypto player like China, Japan and South Korea go a far way in affecting the price. These kind of events cannot be controlled hence to a large extent the volatility cannot be curbed

Controlling Bitcoin will be impossible though the price and market volatility is a big challenge. However, I believe that if measures could be put in place to ensure that the market is stable enough then it can take away the volatility.
Nevertheless if it'll take some small form of regulation to achieve that then it can really help

The bitcoin system can never be changed by anyone, if bitcoin can be managed, it means that bitcoin is not running any more decentralized.

We should not compare bitcoin fluctuation with forex fluctuation. Central banks can control fiat movement because they control fiat supply, different with bitcoin, no one can control bitcoin supply.
Beside that, cryptocurrency market still unregulated market and one negative news can make high movement in market

I think the bitcoin fluctuations always follow the rules and influenced by many factors including the supply and demand factors and the human factor is still the most decisive factor for the fluctuations of bitcoin.

I agree, if bitciin is no longer that volatile, there is a reason behind it, one if which will possibly be, someone or a group of people is trying to manipulate the price of bitcoin, there is also a chance that thwre is something wrong with the algorithm of bitcoin and all will be affected, also bitcoin is decentralized and can be mined, those who will try to control it, will have a lot of problems, or we can say thay it may lead to the downfall of bitcoin itself, since someone will try to take control of it, we can just moce to a different cryptocurrency, and just let the value od bitcoin be high, and focus on other coins, since bitcoin was discovered, we can just look for something like bitcoin again.

No one can control the volatility of Bitcoin. because Bitcoin is a stand-alone crypto. If Bitcoin volatility can be controlled then Bitcoin has no more appeal. Bitcoin will stop there like a currency controlled by the Bank. This condition will be boring and cause investors to leave Bitcoin and will look for another crypto. Which can bring huge profits and have the attraction to follow.

The fluctuations of bitcoin are caused by many factors in which human beings are important factors. If human beings create volatility, then humans can make mistakes for bitcoins become less volatile.

At this stage, we are still in the early phase of development and not even 10% of world's population is using Bitcoin at this stage so considering the upcoming decade I do see a huge potential for growth in the user base so expecting stability at least for next 5 to 10 years is not a wise idea. The lack of awareness about the market is a cause for volatility and it will take some time to build that awareness in order to deal with the volatility.

The decentralized feature of bitcoin makes it absolutely difficult in curbing its volatility for instance when the whales pumps and dumps this usually has a great impact on its volatility however some people e.g traders do capitalized on btc volatility for trading to make profits which I believed will make it more difficult to control due to higher volume traded daily.

You yourself cannot do anything to affect the volatility of crypto. In fact no one can do this on individual basis. The crypto market as a whole is volatile in nature which can correct to some extent if its adoption increases. When the demand of cryptos will increase sufficiently, the volatility may reduce to some extent. But volatility is inseparable from crypto world which can be managed by careful trading and investing.

Volatility can be said to be one of the characteristics or attributes of bitcoin which makes it unique, hence for the volatility to which it is known for to be nipped in the bod it means tha major reformation and restructuring has to take place which may even involve certain level of centralisation but the big question is are we prepared for this?

Of course, the volatility of bitcoin will be gradually overcome as the market grows and instututional capital becomes interested in putting its money in this market, since it will never be so easy to manipulate a market with massive capitalization, for the current size of the market makes it relatively easy for large whales to manipulate prices.

Of course, this process will take several years and in the meantime we will continue to see periods of high volatility, but I am convinced that in the long term the price of bitcoin will tend to behave in a similar way to fiat currencies, with volatilities no greater than 1% from one day to the next.

Bitcoin's instability will not decrease so rapidly, its main and one of the reasons is that it is uncontrolled and decentralized currency. Traders are in a craze to gain as much as possible. It is very difficult to solve their problems by preventing them and impossible. These digital currency instability will remain in normal condition. It may not be possible to confirm that it will happen sometime in the future.

No, it is never possible because it is one of the major features of bitcoin but it is possible to make it quiet stable but nothing more.

The volatility of the bitcoin exchange rate is influenced by many factors.Starting from the state legislation,ending with the number of coins sold.The banking regulatory mechanism can work with bitcoin and help it normalize, but this is only after bitcoin is legalized and other regulatory measures are taken against it.

I think it is not possible now to curb bitcoins volatility because the market of bitcoin is still small and and need long time to reach on a stable position.