Why Is Bitcoin's Value So Volatile?

[Jembut Ireng]

It is volatile because there are a lot of people speculating on its price at the moment, and because the market cap is relatively small when compared to forex stocks and other investment venues. Once it grows larger and larger the price will be increasingly more stable and the peaks/dips will be less dramatic.

I think the bitcoin factor volatile because the decentralization system, in contrast to stocks that mostly have a majority owner so that it can intervene in price but bitcoin has never been known so it looks volatiled.

[_Dawid_]

You are right the current price is very high but many people say that the current price is not high because they believe that bitcoin will be value much more in next few years. The main question is about your strategy, long or short term? If long you don 't have to look for the best price because bitcoin should grow in next few months, if you want to trade the current price is in my opinion too high.

[Dodoymabs]

Volatility is one major factor why investor invest in bitcoin because they just invest it in short term and after that they will buy/sell and repeat.Also it is volatility because no one knows the real value of bitcoin so people just doing some speculation.

[Cjbrinces11]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin Value is volatile. It depends on the supply and demand factor, it may rise or drop anytime. Just like the value of dollars or any kind of money, it could be rise or drop based on the investor who buy and sell in the market. If im not mistaken, I saw it with PHP83,000 last 2010 price but see it now it will rise up to PHP325,000. Now, the value of bitcoin rising up so lets do try this one.

[Fulmand]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin Value is volatile. It depends on the supply and demand factor, it may rise or drop anytime. Just like the value of dollars or any kind of money, it could be rise or drop based on the investor who buy and sell in the market. If im not mistaken, I saw it with PHP83,000 last 2010 price but see it now it will rise up to PHP325,000. Now, the value of bitcoin rising up so lets do try this one.

The reason why bitcoin value so volatile its because of purely base speculation over its value that depends on the movement of the market which is supply and demands. Since the demand of people is highly, the price of bitcoin is rapidly increasing. Therefore we can not control the demand of bitcoin, as well as the supply.

[PrinceCaspian]

That is because the market doesn't have any regulator that will regulate the price and control it. It is a complete freedom and it is very awesome for me because with that capability of being free and volatile, a lot of people are already making thousand of dollars by just taking risk and investing in bitcoin no matter even it is volatile.

[congresowoman]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin Value is volatile. It depends on the supply and demand factor, it may rise or drop anytime. Just like the value of dollars or any kind of money, it could be rise or drop based on the investor who buy and sell in the market. If im not mistaken, I saw it with PHP83,000 last 2010 price but see it now it will rise up to PHP325,000. Now, the value of bitcoin rising up so lets do try this one.

I think it also boils down to the number of investors  investing in bitcoin. If there are few investors, or majority pulling out their shares, technically prices will go down. But when there are plenty of investors investing a good amount of money, then prices will be pretty high as well. Not to mention the increase in demand by people who wants bitcoin too.

[quedex]

That is because the market doesn't have any regulator that will regulate the price and control it. It is a complete freedom and it is very awesome for me because with that capability of being free and volatile, a lot of people are already making thousand of dollars by just taking risk and investing in bitcoin no matter even it is volatile.

If you mean that bitcoin is not a liability of any entity and thus it is not a claim to anyone's balance sheet then yes, but it is a weird way to state so.

If you mean that no state supervisory authority rules over it and if it did, it would be more stable, then it's wrong squared. Most regulators have noticed the presence of Bitcoin (and thus regulated it in their domains, even by simply allowing unrestricted use of it) and it scarcely brings any additional price stability, perhaps except removing some regulatory uncertainty, which is not a most significant factor.

[Trela]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin Value is volatile. It depends on the supply and demand factor, it may rise or drop anytime. Just like the value of dollars or any kind of money, it could be rise or drop based on the investor who buy and sell in the market. If im not mistaken, I saw it with PHP83,000 last 2010 price but see it now it will rise up to PHP325,000. Now, the value of bitcoin rising up so lets do try this one.

I think it also boils down to the number of investors  investing in bitcoin. If there are few investors, or majority pulling out their shares, technically prices will go down. But when there are plenty of investors investing a good amount of money, then prices will be pretty high as well. Not to mention the increase in demand by people who wants bitcoin too.

The rich investors still can not against the total capital of all traders in the market. So, increase the demand will be better than more investors has huge money. Of course, they still can help the Bitcoin price increases, but it not stable.

[coolcoinz]

in fact, bitcoin is not that volatile relative to its small market cap. Bitcoin is a value transfer system, so the price of 1 BTC is fundamentally a function of how much value flows though the network and speculation of the future value of the flow. And when the network grows bigger, the changes in the flow will be smaller and less uncertain.

A year ago Woo Bull predicted that soon the volatility of BTC will match those of central-bank-issued currencies: http://woobull.com/bitcoin-volatility-will-match-major-fiat-currencies-by-2019/
Of course, his (and Vinny Lingham's) target prices have turned out to be massively wrong, but the central point still stands.

Penny stocks are much more volatile. What is happening to Bitcoin is 100% normal when you compare it to new, small companies. Once a company like that makes an announcement that they're reaching a breakthrough their shares go up and when the competition spreads FUD they go down.
I'm sure it will decrease with time. We can already see it starting to decrease with dips getting much shallower.

If anything, this doesn't look very convincing

I'm curious where you see "dips getting much shallower". Just a few weeks ago the price went down below 4,000 dollars per coin, while yesterday Bitcoin seems to have made a new ATH at over 6,300 dollars. This is an increase of more than 50%, just in case. I don't know about you, but personally, I wouldn't call that as dips getting shallower, let alone much shallower. So what is the basis for your claims that Bitcoin price is becoming more stable? I'm really interested in hearing that. Maybe, I don't know something which you do

You're looking at USD value and that's why you can't see it. You should start looking at percents because it's all in the proportions not the amount of USD lost.
You need to go back a couple years and compare to what's going on now. In early 2014 it lost 800$ on the average in 3 months and reached a low of $100 on some exchanges. This was a loss of over 80% of value in less than 4 months, so yes I think that losing 30% of value right after a short spike is nothing compared to a gradual loss of 80%.

[ausbit]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin Value is volatile. It depends on the supply and demand factor, it may rise or drop anytime. Just like the value of dollars or any kind of money, it could be rise or drop based on the investor who buy and sell in the market. If im not mistaken, I saw it with PHP83,000 last 2010 price but see it now it will rise up to PHP325,000. Now, the value of bitcoin rising up so lets do try this one.

The reason why bitcoin value so volatile its because of purely base speculation over its value that depends on the movement of the market which is supply and demands. Since the demand of people is highly, the price of bitcoin is rapidly increasing. Therefore we can not control the demand of bitcoin, as well as the supply.

You can’t make anything virtual thing in your hundred percent control. Like bitcoins, as they are now, decentralized. There are speculations as you said, they just rise due to many users of bitcoin selling and buying. Market price is high or low at any moment, supply and demand varies with time, causing more prices going up and down. And it is the beauty of bitcoin.

[waynechong1995]

The main reason is bitcoins are no regulated, no one would audit this particular 'stock' or whatsoever, it could go up and down and there is no third party to control its pricing, perhaps a group of the biggest whale would only be possible. On the other hand BTC is listed for exchange on hundreds of platform, 24/7, non-geographic locations with various type of national/crypto currencies, which means that everyone in the can participate and their diverse decisions resulted in a highly speculative market, it's risky and highly rewarding judging from its current position.

[BlueStackz]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin's Value is volatile due to its decentralized structure that is why an irregular rising and falling of its value is felt frequently. Though its status so irregular, it seems that it's current status is going all the way up which makes it more recognizable now a days.

Exactly. When one currency is decentralized then there is no check and balance from one supreme power about what is going on. Like our local currencies, there are regulating by the National banks and governments, that is why we have a stable price in business in our country. Bitcoin have decentralization and that makes it more volatile because of randomness.

Yes I agree, the decentralized of the bitcoin is of the reason why so volatile,and an speculative asset that makes people attracts bitcoin. Bitcoin value is volatile because there are many who  suppports bitcoin, Which invested in continues to buy and sell on bitcoin that make it volatile. So the demand is increasing in bitcoin.

I think the reason of volatility in bitcoin price is due to investment of the people and also the trust. When the people have trust in something they will use or invest in them but if there is anything doubtful then nobody will invest their hard earn money in such doubtful thing.

Some statements defame bitcoin a lot and the price which was about 4600 dollars dropped to almost 2900 dollars I just a few days. The reason was the false statement from somebody about bitcoin.

I think the main reason for price volatility in bitcoin is the investment ratio. The more people invest in bitcoin the high will be the price and less people invest in bitcoin the price will be also be low. Some statement also affects the price of bitcoin which were not in favor of bitcoin and they declare bitcoin is a fraud. Many people stop buying bitcoin and thus the price fell down but now it is rising again.

[charlemagne_15]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

It is all because of the happenings that are occuring within the market wherein if there's a sudden increase on the demand of bicoin with the people, then the value will rise. While if bitcoin is not being demanded by the people, then the value will decrease. Another factor is if there is a major events happening with the system of bitcoin just like what happened when China banned bitcoin in their country.

[yanlap]

Its because of the supply and demand which now is being played by trader.

I think there are many reasons why bitcoin value is so volatile like the theory of supply and demand and the absence of government policies with regards to digital currencies in some country if not all. The rise and fall of its exchange value depends in its investors who are mostly also its users. As we review its price status for the past years we can really say it's getting higher and the users are getting more motivated thus attracting more people to engage in bitcoin.

The demand of the bitcoin is now increasing more and more so if he bitcoin will help the people and the value of the bitcoin will increase more and more so you will give the people the money for the government as the side source of the bitcoin, it is now easy and it is not very tough for the people to buy the bitcoin and to hold for the long time, I love to hold it for the long time and the profit will be more than this.

[deisik]

in fact, bitcoin is not that volatile relative to its small market cap. Bitcoin is a value transfer system, so the price of 1 BTC is fundamentally a function of how much value flows though the network and speculation of the future value of the flow. And when the network grows bigger, the changes in the flow will be smaller and less uncertain.

A year ago Woo Bull predicted that soon the volatility of BTC will match those of central-bank-issued currencies: http://woobull.com/bitcoin-volatility-will-match-major-fiat-currencies-by-2019/
Of course, his (and Vinny Lingham's) target prices have turned out to be massively wrong, but the central point still stands.

Penny stocks are much more volatile. What is happening to Bitcoin is 100% normal when you compare it to new, small companies. Once a company like that makes an announcement that they're reaching a breakthrough their shares go up and when the competition spreads FUD they go down.
I'm sure it will decrease with time. We can already see it starting to decrease with dips getting much shallower.

If anything, this doesn't look very convincing

I'm curious where you see "dips getting much shallower". Just a few weeks ago the price went down below 4,000 dollars per coin, while yesterday Bitcoin seems to have made a new ATH at over 6,300 dollars. This is an increase of more than 50%, just in case. I don't know about you, but personally, I wouldn't call that as dips getting shallower, let alone much shallower. So what is the basis for your claims that Bitcoin price is becoming more stable? I'm really interested in hearing that. Maybe, I don't know something which you do

You're looking at USD value and that's why you can't see it. You should start looking at percents because it's all in the proportions not the amount of USD lost.
You need to go back a couple years and compare to what's going on now. In early 2014 it lost 800$ on the average in 3 months and reached a low of $100 on some exchanges. This was a loss of over 80% of value in less than 4 months, so yes I think that losing 30% of value right after a short spike is nothing compared to a gradual loss of 80%.

You are just trying to distort the facts so they better fit your idea

First of all, I think you should check the price charts for yourself. If you do that, you will see that Bitcoin had been declining from its 2013 highs for over year with a minimum of around 180 dollars in February, 2015. So I don't think you could easily compare this decline with the volatility we see today, where prices crash and spike dozens of percentages within just a few days. Further, you might have missed that part of my post where I talk specifically about percentages, where I say that the plunge from 6,000 down to below 4,000 and subsequent growth to over 6,000 dollars (now above 7,000) is over 50%, just in case (though it depends on what you take as the base). And last but certainly not least, there is a good theoretical explanation that with the price growth we will see an ever increasing growth in volatility. Yes, in percentages, not just in absolute terms, mind you

[aeternus]

Bitcoin is and always will be very volatile, but this does not mean having to give up his purchase. If you look at the chart of growth rates you will see that every year the price of bitcoin is increasing. This trend will persist for a very long time so you can buy it at any time.

so i should buy bitcoin at this point or when the value reduce.

You could wait but there is not guarantee the price is going to get any cheaper in fact the opposite may happen and bitcoin may become extremely expensive so at the end of the day you are the one that needs to take the decision of whether or not you want to buy bitcoin at the current prices.

[fasdorcas]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin's Value is volatile due to its decentralized structure that is why an irregular rising and falling of its value is felt frequently. Though its status so irregular, it seems that it's current status is going all the way up which makes it more recognizable now a days.

Exactly. When one currency is decentralized then there is no check and balance from one supreme power about what is going on. Like our local currencies, there are regulating by the National banks and governments, that is why we have a stable price in business in our country. Bitcoin have decentralization and that makes it more volatile because of randomness.

Yes I agree, the decentralized of the bitcoin is of the reason why so volatile,and an speculative asset that makes people attracts bitcoin. Bitcoin value is volatile because there are many who  suppports bitcoin, Which invested in continues to buy and sell on bitcoin that make it volatile. So the demand is increasing in bitcoin.

I think the reason of volatility in bitcoin price is due to investment of the people and also the trust. When the people have trust in something they will use or invest in them but if there is anything doubtful then nobody will invest their hard earn money in such doubtful thing.

Some statements defame bitcoin a lot and the price which was about 4600 dollars dropped to almost 2900 dollars I just a few days. The reason was the false statement from somebody about bitcoin.

May be you are right with your experience that volatility is due to people interest in bitcoin but I think it is not a volatility because I am seeing it as a normal nature of latest technology.

I think in future many things would be happening with immediate change because people will focus on time so much and they would have been of nature to see changes in things within seconds because it would be need of that time and it would not be wonder for people seeing rapid changes in things.  

[xvids]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Bitcoin's value depends on the investors and users. The more people investing and holding bitcoin, the higher the price goes. It really depends on market demand. So, expect bitcoin to rocket-up because more and more people are getting interested in bitcoin because it is really profitable.

[unknown-user]

Why Is Bitcoin's Value So Volatile? I am confused to buy bitcoin now when it's value is too high.

Maybe it has to do with the volume in the market that is also related with the demand that it is getting. Bitcoin is volatile for the fact that its market price changes everytime. Fluctuations is natural that its value sometimes decrease and sometimes increases Don't be confused into buying and investing to Bitcoin just because its value someimes fall, because its value is as of this moment, is continuously increasing.