This is silly. "Extremely large scale speculation"? How am I not seeing the billions of dollars of BTC derivatives?
Wait, i meant "extremely large" on bitcoin scale, not on world scale. This is relative.
It's strange to have a problem with someone thinking bitcoin is going to be huge and puts their money on it. Anyone buying is "speculating" that it will work out well for them.
Actually, by "speculation" i mean repeatedly buying and selling large amounts of bitcoins in a short amount of time.
Don't hold your breath for 'stable' BTC/USD either. It probably won't be stable until you can't get 1BTC with all the worthless dollars ever printed.
Okay, I was a little over the top.
If you go to the market and buy a bunch you push the price up for yourself, and then when you sell them you push the price down and you lose money.
If anyone is doing this then they are just giving money away, which is fine.
What is actually happening is that people "make the market" by offering some for sale and offering to buy some. If they offer the best deals on both sides and other people take those deals then they make money. They are getting paid for offering the 'service' of a lower spread.
And this decreases volatility compared to what it would be otherwise. I realize it doesn't look this way. When ever the prices move a lot it is true that speculators trade a lot, but the price would have moved more if market makers did not have those offers out there.
Do a little thought experiment. Look at the order book and imagine what would happen if 20k worth of market orders for coins suddenly came in, how high would the price go? Now remove from the order book which ever asks you consider to be "speculative", how much does the price move now?