Bitcoin Forum

Here is a real-world example of why I like a stable bitcoin price:

The other day I was researching web sites that have online sports-betting, cause I like to bet on NFL Football. For these regular sports-book web sites, it's a real pain to sign up and get funds and they charge you outrageous fees to withdraw money.

But lo and behold, there is now a bitcoin sports book, btcsportsbet.com. Last week it only took me 10 minutes to get setup with them, when I sent my BTC over from my trading account, and I placed bets on last Sundays games. It's anonymous, there are virtually no fees to speak of, and it's instantaneous.

Now having the BTC price stable in the $3 range makes it worthwhile for me to sports-bet; but if the price is very volatile, I can't rely on that currency while I'm sports-betting. I would imagine most merchants would want a stable BTC currency before adopting it.

Your thoughts?

Another thing.

When I tell folks who are new to bitcoins what it's all about, it's so nice to be able to say that the value has settled this last month into the $3 range.

I do not think that it has "settled", but I believe that volatility will be lower in the future than it was so far.

You only notice the volatility if you think that xBTC are worth xUSD/EUR.

Just think that xBTC=xBTC and there is no volatility. It's as simple as that.

But why would I think like that?  For lots of people getting xBTC means giving somebody xUSD, and most people are concerned with at least preserving the purchasing power they started with when going from one to the other.

Stable price is not good, it means no more people adopt bitcoin.

A such low price, means that few ppl use it.

doesn't it mean that there is adequate demand for the 7200 coins per day being printed right now, and that people in fact ARE adopting bitcoin?

Funny, I think the exact opposite.

Why would a merchant want to adopt bitcoins if the price was volatile? Too risky.

Think about it...
If you buy $30 sunglasses with 10 bitcoins today, and then bitcoin lost $1 in value the next day, merchant only has $20 nopw and lost all his profit.

a good % of the 7,200 coins that are "printed" each day are not sold on the market right away, (some might be waiting years)
but in any case, almost always there is over 10,000 coins traded pre day.
so ya their is in fact more and more people adopting bitcoin

and with the projects like bitcoindeals.com - i think we'll start seeing more and more people really using bitcoin for gift buying and stuff

lets look at how facebook adoption came about
http://www.insidefacebook.com/wp-content/uploads/2010/02/Facebook400Million-500x347.png


just wait in a few years their will be 4billion coins traded daily  
and not one will be traded of USD ;)

 

the market is very young... and very volatile, but this will change, once things like derivatives are introduced, volatility will be meaningless to merchants

besides most merchants are more then willing to take a 10% hit if it means more customers

you don't see any merchant charging more when you use VISA and not cash.

I totally agree, with you.  I was just pointing out that a stable price, like what we have been experiencing the last few weeks, would make merchants more inclined to trust BTC more as a valid currency.

agreed.

what a merchent would like to see, would be stable prices with high volume.

if we could see a 50k coin DUMP that would be quickly picked up and not effect price much. that would be cool

We did see that not too long ago.  There was a 40,000BTC bid at 2.9.  It got sold into.  There was a brief fall below 2.9 and then it quickly bounced back up.  It was impressive, and that was one of the events that persuaded me to be a bit less bearish, at least for the short term.

If bitcoin will be adopted by more people, it's price WILL increase, because more people will buy btc for their needs

So that stability is only temporary

When people say "volatility is bad for merchants", they actually mean "price drops are bad for merchants".

Volatility can be managed by hedging, so it's not detrimental to merchants.

hmm..

I hope so!

Anyway, merchants can use BitPay or Coinbase for a 1% fee (much cheaper than traditional payment processing service fees) to get guaranteed USD prices for their products/ services. Volatility is really more of a concern for consumers than for merchants who understand their options.

Another reason stability is good is because less time is spent on price speculation which leaves more time to focus on innovating and building Bitcoin businesses/infrastructure.

Litecoin has also been stable this is a good thing.

You need a huge market cap for truly stable prices à la forex. The current BTC/LTC stability is just a temporary farce, volatility will be back soon.

If it stabilized now at $10B market cap then bitcoin pretty much failed and did not get the adoption that it deserves

Bitcoin's been stable for less than a month. If it floats in this tight range for more than a year, then we can assume it's on its way to being stable.

A period of stability is justification for the previous growth. Its a self-corrective process that evaluates all the factors that make up the market, including manipulation. People are throwing out so many theories and explanations to why its correcting or whether its a form of manipulation. That is all too unnecessarily complicated and narrow minded, and by doing so you're missing the big picture. It's as simple as if the price deserves to be where its at, then it'll stay; if not, it will correct itself until it finds its stability. Thats it. No fancy TA or theories. However, thats under the assumption that the status quo stays the same. There was manipulation back then and it will still be there, so its irrelevant.

This doesn't mean its an end to volatility, but it will be less likely now that the market knows its range. As both price and time move away from this range, the less reliable it will be, which in that case the whole cycle starts again and reevaluates.

It's such a simple and straightforward concept, but because of the volatility we've seen, its hard to step back far enough to grasp that the market is not China or Houbi; its this forum, its every currency pair  linked directly or indirectly, including alt coins. Hell thats still probably looking at it too narrow minded, its shit that humans don't and probably never will be able to understand. To put into perspective, if bitcoin was earth, then the market is the whole universe. Thinking in terms of the solar system or even the galaxy would be greatly underestimating it. Why bother trying to figure it out? Its a waste of time, let it do its shit and it'll return to the bitcoin world as we currently picture it as.

EDIT: For that universe analogy, thats assuming the universe is the all encompassing entity for all of existence. However, its the all encompassing entity that we humans have acknowledged. Mind=Self Blown