Bitcoin's volatility is a non-issue

[Vertex_ICO]

For people that all in and can't afford for things to dip then, I think it is a huge issue. But otherwise, I actually think it is a blessing.

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[Pan Troglodytes]

I basically like your arguments and agree with them. I agree that high volatility is a non-issue in itself. Nevertheless you are missing one important aspect: transaction fees. They are low but whenever the volatility gets high, they get insanely high. And I think that the biggest issue currently is high transaction fees in times of large volatility and it is in fact a blocker for bitcoin being used as a currency.

[Uberse]

If bitcoin will be very expensive, a sharp drop in it with normal volatility, if it coincides with negative information, can lead to panic that will work as a domino effect and bitcoin may depreciate in one or several days. Is this not worthy of attention and is not a problem related to volatility?

But how did it get expensive in the first place? There was positive information which led to FOMA and worked as a domino effect and bitcoin appreciated in one or several days. This is indeed worthy of attention. Whether it is a problem in this case depends on whether you held on or sold before the appreciation. But it is my point that the problem is actually just one of perception. If you bought a bitcoin and transferred it for a good or service before the spike, that spike has not really hurt you. It may irritate you, but you paid a price for it that you decided was a good price for your immediate purposes at that time.

[Uberse]

I like Uberse's style. He stealthily included Ethereum in the article in a sentence that says both BTC and ETH are good stores of value lol.

Ethereum is not a good store of value because what it promises to deliver will not be delivered. Lets watch how long they can keep the ongoing scam last.

I just included Ethereum because it is a leading crypto, nothing stealthy intended. I should add that I bought Ethers during their presale and have been hodling ever since. If it's a scam it's an incredibly good one. But it is not a scam.

[suzanne5223]

Like you said OP the bitcoin volatility in nature is not an issue cause bitcoin volatility always work to the pumping is price aspect but the FUD which was said or posted online and the GOX flooding the market are the cause of the dumb in prize. Therefore, bitcoin is a good store of value.

[Uberse]

I basically like your arguments and agree with them. I agree that high volatility is a non-issue in itself. Nevertheless you are missing one important aspect: transaction fees. They are low but whenever the volatility gets high, they get insanely high. And I think that the biggest issue currently is high transaction fees in times of large volatility and it is in fact a blocker for bitcoin being used as a currency.

Good point, but I think the Lightening Network should eventually resolve the fee problem, and as I understand it fees are already a lot lower than they were during the last feeding frenzy. Eventually SegWit will become the dominant address format, helping to keep fees under control. But also, if Bitcoin fees do go sky high, more and more people will be willing to use Ether or Bitcoin Cash or Litecoin instead. Excessive Bitcoin fees will eventually go away completely because fewer and fewer people will be willing to pay them and will know how not to.

[Uberse]

• Each Bitcoin transaction is a zero-sum game -- one party benefits to the same extent that the other does not benefit. So one party is guaranteed always to be fine with the volatility. And neither party knows for sure (or at all) who that beneficiary will be.

You don't think this is a big issue at all? A small business with razor thin margins could very easily lose money and lose the capability to pay their suppliers in case of a slide. That alone makes accepting it unnecessarily risky and very far from ideal. It's fine peer-to-peer, but when you have an obligation to pay and a business to run, it's a significant variable you could just do away with. They could use a payment processor to mitigate the risks, but that also defeats the purpose.

Volatility could very well be a deal breaker in a few scenarios. While I acknowledge that it gets blown out of proportion here and there, it's certainly not a non-issue. If it works for you, and it does for most of us, great. That doesn't mean it will work for everyone else though. Volatility is a problem that can presumably be solved by time and adoption, and shouldn't be swept under the rug.

You make good points about merchants with razor-thin margins -- which is the condition of a lot of merchants, probably most by far. Those merchants would not be able to afford the risk of holding the bitcoins and so would miss out on any appreciation in their value after a sale. Clearly such businesses would only put a Bitcoin logo on their door if they thought it would bring in more business. It it was too much hassle too soon without benefit they would take the decals off.  I'm not sure what you mean that use of a payment processor defeats the purpose. The purpose is to increase sales and profits. If passing their bitcoins instantly through Coinbase for transfer to their bank account still results in enough more money to make the effort worthwhile, they would do it. I've made the point in other posts here that merchants might increase the feasibility of bitcoins by stipulating that there are absolutely no returns on bitcoin sales -- all sales final, and it would say so on the receipt. Also, bitcoin pricing could be highly flexible -- when the BTC price is rising, prices for BTC sales could be lower than the cash/credit-card price. When the BTC price is falling, such prices would be higher, maybe a lot higher -- ruthless pawn-shop rates.

I suspect that such merchants will eventually realize that, while BTC has volatility risk, it also has benefits that might be of unique value to them, more so than a chain or big box.

[tunapa]

Volatility is common to all trading instruments, I dont think  that should be an isolated issue to be hammered on bitcoin alone. Every investment has it's risk and every investor should know this as well as know why they are investing into it. The value doesn't depreciate even with volatility so investors should jot be bothered about it.

[Slark]

Bitcoin has launched lightening network which would make blockckain network fast and reduces the cost involved in transection.

Cost of transactions is not that problematic at this point - it's OKay'ish. Of course I would like to have Lightning network functionality and speed.
But that LN won't make price stable all of a sudden.  Most people heard about bitcoin because of its volatile price - so I don't think that it is so bad after all.

[Dondont]

My opinion is that if bitcoin was not so volatile that wouldnt suit traders.
Traders love the volatility, well experienced traders that is, the ones who
Can read the charts etc.

And if bitcoin was not so volatile there could probably be mor acceptance
in the marketplace for it to be used as a currency.

indeed a person's ability to read charts or not is not a solution even for volatile market conditions. I think it's just one way to get a good position, the next thing is let the market decide.

[faceoff97]

Just like any other form of investment its common denominator is its volatility. The only difference is that bitcoin price is show too large changes in value in the most unexpected time. Well, bitcoin is kniwn to be like that since then. I think more people engage with brcause of this kind of feature. Bitcoin is not bitcoin if not volatile.

[thom88]

Volatility is OK but the amount that Bitcoin has is definitely an issue if it shall be adapted as a currency.

[colkcolk]

The argument that Bitcoin's volatility specifically negates its value as a store of value is clearly false as well. Stocks and commodities and their futures (as well as the effective interest rates of some bonds) are highly volatile. The mantra is that you accept their risk in exchange for growth. Fine. But volatile Bitcoin has growth potential too -- lots of growth potential. Both Bitcoin and Ethereum, as systems of decentralized, immutable, economical, sustainable, and perfectly legal data-registration means that everyone will become their own notary public. The implications for intellectual property protection are arguably beyond what we can now imagine.
Underlying all of Bitcoin's volatility is an unchanging protocol that is proven to work -- and expected to grow.

This volatility can be seen negatively of positively, depends on the person seeing and intention to say negative or positive. Volatility can be utilized to collect more profit for scalper, but it is not to be worried to the long term trader or investor as this bitcoin or crypto principally will grow as the supply is limited.

[timerland]

I've never see any actual bitcoin adopters say that they have an issue with bitcoin volatility. In fact, most are perfectly comfortable with putting the majority of their wealth in bitcoin for the long term, or accept bitcoin payments at face value (i.e., not converting/fixing BTC transactions to fiat value).

However, it still seems to be a constantly discussed "issue" by some, which I don't understand.

Yes, BTC is volatile, but it's still a long term store of value. They are not mutually exclusive. Bitcoin can still function as a currency, while being volatile, as proven by thousands of bitcoin accepting merchants and traders worldwide. It's all about perception, even though you perceive fiat as being not volatile, it's not a long term store of value at all. If you really do't believe in BTC at all, and you want to facilitate transactions, that's alright as well. You can always hedge your bitcoin transactions, it's easy as. It's literally the same as forex risk management if you're that concerned about it.

[ralle14]

Volatility is OK but the amount that Bitcoin has is definitely an issue if it shall be adapted as a currency.

The limited supply of Bitcoin won't be a huge problem once it becomes mainstream and you could send a smaller amount of Bitcoin aka satoshis if prices go up to $1mil

For people that all in and can't afford for things to dip then, I think it is a huge issue. But otherwise, I actually think it is a blessing.

That's why a lot of people doesn't recommend anyone to go all in on anything that involves risks. People who are new to investing doesn't expect or isn't ready to lose their money and once they lose money they start to complain about Bitcoin's this and that.

[squatz1]

That just simply isn't true, volatility in value is a huge problem when you're trying to establish yourself as a currency. Lets just say this sort of volatility was present in the USD, that would mean that one day everything I have could be worth 50 percent less (or more) then the last. While it is good when the price goes it, it isn't good at all (it's horribly catastrophic) if the price is to crash and you lose value in pretty much everything

Volatility must stop if we want to become a currency.

[DBronze98]

The Crypto market is an unfair floor, and so is Bitcoin. The big guys are the ones who hold the best things, can eliminate everything the way they want. With the profits of losing losers, do not be foolish to think that "win-win" is real.

[VitKoyn]

The volatility of Bitcoin is only an issue to those people that wants to use it as a currency, and I think that there are only few since most people invest in Bitcoin because they want to earn profit from it not because they want to use it to pay or buy something. But of course it is an issue if most people will use it as a mode of payment, imagine a currency that worth $5 that became $10 and fall back to $1 in just a few minutes and the time that you will pay for what you bought or availed, are you willing to use that kind of currency? of course not and I doubt that stores and merchants will do without partnering with a payment processor.

[brickafterbrickwalldpt]

Bitcoins price has been changing a lot lately. Many people say that it discourages others from buying it and cause a huge panic sell. THe only problem is that whales are buying a lot of BTC in order not to be late for the party. Thanks to the changing Bitcoin price it is fairly easy to earn a lot of money if you buy a dip and then sell it at ATH. It sounds easy, but many people don't do it or fail because they panic. THey have no faith in Bitcoin and that's why they are not ready to use it yet. They should have started with studying Bitcoin.

[jseverson]

I'm not sure what you mean that use of a payment processor defeats the purpose. The purpose is to increase sales and profits. If passing their bitcoins instantly through Coinbase for transfer to their bank account still results in enough more money to make the effort worthwhile, they would do it. I've made the point in other posts here that merchants might increase the feasibility of bitcoins by stipulating that there are absolutely no returns on bitcoin sales -- all sales final, and it would say so on the receipt. Also, bitcoin pricing could be highly flexible -- when the BTC price is rising, prices for BTC sales could be lower than the cash/credit-card price. When the BTC price is falling, such prices would be higher, maybe a lot higher -- ruthless pawn-shop rates.

What I was trying to say is that Bitcoin was originally meant, in part, to eliminate third party payment processors and the fees associated with them. Using a payment processor would be no different than accepting credit card transactions, in essence, with the need to trust a third party.

But yeah, if it brings business in, go for it. It's true that it's more viable now than ever, given the fact that you could instantly convert Bitcoins into fiat using payment processors. Consider this, though: if Bitcoin wasn't volatile, you wouldn't need to pay for their services in the first place, and you won't need to adjust prices and margins every time Bitcoin goes bananas.