According to Saylor, the second main objection outsiders have is "what about the volatility?"How is an asset a store of value if it can have double-digit days up or down?
Saylor retorts that volatility is falling, and he's not wrong. Bitcoin was volatile in 2017 at the peak of retail mania. This year, we've seen a prolonged period of low-volatility consolidation.
Part of the reason for decreased volatility is the activity of institutions like MicroStrategy. Institutional money entering an asset class dampens volatility in both directions.
Saylor states that he was "in the market for every minute" for several days, presumably using advanced trade execution services to ensure that this massive purchase of Bitcoin didn't move markets. In fact, he claims that MicroStrategy's purchase dampened volatility in Bitcoin markets instead of causing price swings.
Apparently MicroStrategy was in the market for weeks buying incremental amounts on a daily basis without moving the market. We can assume that this also helped to dampen downward price movements. How do we foresee this kind of institutional demand impacting on the downward volatility in the coming months? Can we possibly expect a reduced percentage drop after the next 4-year ATH in 2022/23? The typically 80% draw down could be reduced to <50% in the next bear market?
This revelation makes me reconsider how much I might be willing to sell near this cycle top.
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