Volatility really a bad thing?

[randayh]

Okay, during this latest large price correction I got an influx of BTC denominated orders to my website. Coincidence?

This made me think, can a falling price actuality increase BTCs usage as a currency and less as a store of value? In my opinion, these corrections are only growing pains to allow for further growth. Concurrently, if the price for BTC were to only increase in value, no one would want to spend their coins and that would eliminate their true function as a currency and therefor their value.

www.bitcoins4barter.com

[beetcoin]

if you're running a business, the first thing you need is stability. you need to avoid risks for big losses. if it weren't for bitpay, businesses won't want to use bitcoins if it's fluctuating by 25% (up or down) within 2 or 3 hours. so no, it's not a good thing.

[Desensitizer]

Imagine the hassle of having to change prices constantly and having to worry about cashing out constantly in order to insure that you do not lose profits. Instability of bitcoin value adds a whole new hassle to everything a preexisting business has to deal with. They are not focused on analyzing the marketplaces and knowing when to sell, they want to be devoting all of their time to best maintaining their business and serving their customer base. The less they have to worry about the value of bitcoins, the better.

[empoweoqwj]

Volatility really is a bad thing if you want usage to spread and normal people to use it, and for it not just to be an "investment bubble"

One of the "great uses" we keep hearing for bitcoin is people sending their wages "back home" to their family.

Imagine the conversation last night.
Worker: Just got my wages converted to btc, will be in your wallet in an hour.
Family back home: Great. Thanks

... hour passes

Family back home: I converted it back to (insert local currency here) and its 40% less than you said it will be. I can't afford to pay the rent AND feed the kids.
Worker: Its not my fault bitcoin is so volatile. I'll use Western Union next month, so you can be sure the kids get fed.

People love certainty and hate uncertainty, especially where money is involved.

I'm currently looking at the high and low for the last 24 hrs.
Low: 650.0
High: 1119

Has to be more stable than this if its going to have a future in the real world. Painful truth. And if it doesn't get adopted by normal people, the bubble will pop and permanently.

How to get it more stable? No idea.

[richo262]

Yes, regulations a great idea ... *shoots self in face*

Look at every bubble at the moment, and tell me it is not a byproduct of government regulations.

Aussie property market, only skyrocketed in 2004 when the gov decided to make CG tax discounted if the asset is held for more than a year. Constantly exacerbated by more government programs such as 'first home buyers' which is really just a method of making the selling price higher, or negative gearing where a landlord gets to use the asset to minimise tax as they account the depreciation of the house itself against their combined income, therefore making owning property a tax avoidance measure.

If you want to regulate bitcoin so people just can't sell it when they want to, you will never get a true value, you'll get artificial nonsense.

And exactly how do you propose a global commodity is to be regulated in the jurisdiction of each individual exchange identically?

If one exchange is free market, it will be the true value, if it drops, only buyers will be on that exchange, and only sellers will be on the artificially high exchange. Buyers will never meet sellers. Bitcoin goes stagnant or only the free market exchange is used rendering all other exchanges useless.

[niothor]

Ok, so the consensus is volatility is very bad.  so I propose that regulation will prevent volatility. This can be done with the introduction of curbs and limits at the exchanges. If price falls are rises beyond a percentage in a trading session, trading is stopped or limited until the market cools. I know these kinds of processes already apply to stock exchanges, but not sure how these can be applied to BTC exchanges.

The consensus here is that volatility is bad only when the price is falling.

[knight22]

Ok, so the consensus is volatility is very bad.  so I propose that regulation will prevent volatility. This can be done with the introduction of curbs and limits at the exchanges. If price falls are rises beyond a percentage in a trading session, trading is stopped or limited until the market cools. I know these kinds of processes already apply to stock exchanges, but not sure how these can be applied to BTC exchanges.

The consensus here is that volatility is bad only when the price is falling.

Not for those who take this opportunity to double their coins  

[JayB]

Good thing for who? Bad thing for who? specify your point of reference...

It's a good thing for smart people who know how to benefit from the swings, and bad for everyone else

[Mjbmonetarymetals]

Price corrections are growing pains as Bitcoin is being adopted its naturally finding more hands which will reduce volatility, at $10,000 Bitcoin will be far more stable then it is currently.

[bryant.coleman]

The consensus here is that volatility is bad only when the price is falling.

Exactly. Many of those who had lost money yesterday when BTC came down from $1,200 to $700 were the ones who gained exponentially when BTC rose from $100 to $1,200 in a matter of few weeks. So take the long term price movement: $100 to $700, that's still extremely good net gains for me.

[beetcoin]

Price corrections are growing pains as Bitcoin is being adopted its naturally finding more hands which will reduce volatility, at $10,000 Bitcoin will be far more stable then it is currently.

maybe, but i still think it'll be extremely volatile, when compared to other currencies or assets. bitcoin's pro is also its con.. there's no insurance, and at any day the infrastructure can crash. then again, because of this nature, it can also zoom to another galaxy and hit 6 digits one day too.

[Elwar]

I make good money on this volatility.

I will look back on these days of volatility as the "good ol' days".

[BTCisthefuture]

Okay, during this latest large price correction I got an influx of BTC denominated orders to my website. Coincidence?

This made me think, can a falling price actuality increase BTCs usage as a currency and less as a store of value? In my opinion, these corrections are only growing pains to allow for further growth. Concurrently, if the price for BTC were to only increase in value, no one would want to spend their coins and that would eliminate their true function as a currency and therefor their value.

www.bitcoins4barter.com

but just like if the price keeps going up people are more likely to hoard their bitcoins, if the price keeps going down people are less likely to stay involved with bitcoin, few regular everyday people will want to keep buying something that goes down in value too often.

i think like others said. stability is needed for more adoption of bitcoin, both on the business side of things and the consumer side.

[BTCisthefuture]

Ok, so the consensus is volatility is very bad.  so I propose that regulation will prevent volatility. This can be done with the introduction of curbs and limits at the exchanges. If price falls are rises beyond a percentage in a trading session, trading is stopped or limited until the market cools. I know these kinds of processes already apply to stock exchanges, but not sure how these can be applied to BTC exchanges.

aside from the fact that you probably couldn't get all exchanges to agree on something like that, and a lot of bitcoin fans/users probably wouldn't like it,   i think the more logical and realistic approach is to just let the market grow.  bitcoin is still in it's infancy, its a small market. volatility is normal in small markets.

so long as more companies and people continue to use bitcoin (which is the case regardless of it's ups and downs in value) the market will eventually smooth out on it's own. it's going to take time though.

[pand70]

Okay, during this latest large price correction I got an influx of BTC denominated orders to my website. Coincidence?

This made me think, can a falling price actuality increase BTCs usage as a currency and less as a store of value? In my opinion, these corrections are only growing pains to allow for further growth. Concurrently, if the price for BTC were to only increase in value, no one would want to spend their coins and that would eliminate their true function as a currency and therefor their value.

www.bitcoins4barter.com

Volatility is the worst thing in bitcoin. It scares investors off and gives the feeling of a bubble to the currency.

[Romyen]

Complaining about volatility at this stage of bitcoin evolution is like pissing into the wind. Since it's inevitable, use it as an opportunity to increase your bitcoin holdings. Not by converting to fiat when the price drops, but by converting to and from alt-coins. (If you are a US citizen, converting to fiat could cause either tax problems and/or potential legal problems if unreported.)

Volatility is generally higher for the alt-coins than for bitcoins as measured against any fiat currency, but the timing is very close. When the bitcoin price drops, alt-coin price drops more, making them cheap when measured in bitcoins, presenting a buying opportunity. Alt-coins become expensive when the bitcoin price is high, thus presenting a selling opportunity.

As more people realize this and take advantage of it, volatility measured against fiat will go down. This is how alt-coins can reduce bitcoin volatility.

A major caveat is that most alt-coins are junk. Be careful with what you buy.

[pand70]

Complaining about volatility at this stage of bitcoin evolution is like pissing into the wind. Since it's inevitable, use it as an opportunity to increase your bitcoin holdings.

No one is complaining because is something pretty much expected.
That being said we can't ignore the fact that volatility slows down mainstream acceptance and generates bad publicity.