More people More volatility

[hasmukh_rawal]

Lets assume bitcoin makes it through all the barriers and survives the rules and regulations of the governments and yet is decentralized.
It is widely adopted and many people have started to use it. Bitcoin has grown to thousands/millions of dollars in price causing huge volatility.

If there are so many people using it on a daily basis, won't the volatility cause huge fluctuations in it's price ?
If bitcoin has such huge volatility how will it be able to sustain it's price ? The fluctuations in price will cause problems to merchants.
So according to what I think, if there is not a solution to volatility then BTC cannot be used on a regular basis for payments in various places of the world.

Eg: One day I go and check a guitar's price about $100 and then a week later I go to purchase it just to notice that I would have to pay more BTC this time just because of the drop in bitcoin's price.


Conclusions from the comments

Conclusion 1 : More people is not equal to more volatility but more active traders = more volatility
Conclusion 2 : More people involved in bitcoin will mean that the supply of BTC will be well spread among each other and hence volatility will decrease.

Thanks for taking part in the discussion.

[Zadicar]

If there are so many people using it on a daily basis, won't the volatility cause huge fluctuations in it's price ?

These are one of the things would really be experienced once bitcoin is being adopted on a point that the entire population is using it. Volatility is there due to daily transactions and I cant think of
 that 21M would be sufficient to circulate if we do base up the number of users will really be in full extent. Some or most people do like adoption but they didn't able to foreseen on how it would work
if we do come into that point.

[gentlemand]

Bitcoin started off a tiny piece of plankton being sucked around by currents, maybe now it's a wee rowboat being smacked by the waves, by the time it's everywhere it'll be a supertanker with all the sluggishness that entails.

The more people and money that pour in, the steadier it becomes. One person who tries to initiate a major move will be eaten alive by thousands attempting to capitalise on it. In the great scheme of things volatility has barely wound down, but the potential number of people involved now may only be 1-2% of the future total.

I doubt it'll ever be steady enough for a pure BTC economy if people still have bills and costs to meet in USD, but then again I'm not convinced it'll ever be a currency.

[odolvlobo]

Lets assume bitcoin makes it through all the barriers and survives the rules and regulations of the governments and yet is decentralized.
It is widely adopted and many people have started to use it. Bitcoin has grown to thousands/millions of dollars in price causing huge volatility.

If there are so many people using it on a daily basis, won't the volatility cause huge fluctuations in it's price ?
If bitcoin has such huge volatility how will it be able to sustain it's price ? The fluctuations in price will cause problems to merchants.
So according to what I think, if there is not a solution to volatility then BTC cannot be used on a regular basis for payments in various places of the world.

Eg: One day I go and check a guitar's price about $100 and then a week later I go to purchase it just to notice that I would have to pay more BTC this time just because of the drop in bitcoin's price.

Assuming that each person acts independently, more adoption lowers volatility.

Imagine that a person claps their hands each time they perform an action that affects Bitcoin. If there are 1, or 10, or even 100 people, then you will hear each clap. However, you cannot hear individual claps if there are a million people. You can only hear white noise.

[Juggy777]

Lets assume bitcoin makes it through all the barriers and survives the rules and regulations of the governments and yet is decentralized.
It is widely adopted and many people have started to use it. Bitcoin has grown to thousands/millions of dollars in price causing huge volatility.

If there are so many people using it on a daily basis, won't the volatility cause huge fluctuations in it's price ?
If bitcoin has such huge volatility how will it be able to sustain it's price ? The fluctuations in price will cause problems to merchants.
So according to what I think, if there is not a solution to volatility then BTC cannot be used on a regular basis for payments in various places of the world.

Eg: One day I go and check a guitar's price about $100 and then a week later I go to purchase it just to notice that I would have to pay more BTC this time just because of the drop in bitcoin's price.

Hi remember bitcoins is based on demand and supply, if more people jump in it'll exceed supply that means prices shall rise as there is more demand but less supply. Now if you believe that with the inclusion of more people selling it'll fluctuate you're wrong, it takes massive coins selling to create a dump and not all can buy one bitcoins, remember when one's selling someone is buying too, so more money is flowing in. In short I don't believe mass adoption will cause fluctuations.

[supermine]

More traders = More volatility so more people doesn't means that it will be highly volatile.We can see two type of volatile in the bitcoin prices which is daily swing and huge bump and dump the traders are the reason why the prices were swinging which is the major problem for the bitcoin to be accepted as currency and the dump and bump were initiated by the whales,if more people adopted to bitcoin then the whales bitcoin will be diluted among the world.

[Herbys]

BTC volatility reaches a minimum of three months!

This is the result of some decline in demand and lack of manipulation, but it is not for long.

With long-term investments, the volatility of BTC can be ignored, since such investors are interested in the value trend.

[soy]

1.19 on Bitcoin Historical Volatility Index on Bitmex. Yesterday, we reached the lowest level from 01/2017 (0.67)...
The interest will come back when Bitcoin'll break its triangle.... Upwards or downwards, but probably not before.

[aoluain]

I would agree with other opjnions here, more adoption should steady volatility.
There will always be fluctuations because of human activity related to bitcoin
but as the future plays out huge swings should reduce because of greater population

[melallgarant2015]

Hi remember bitcoins is based on demand and supply, if more people jump in it'll exceed supply that means prices shall rise as there is more demand but less supply. Now if you believe that with the inclusion of more people selling it'll fluctuate you're wrong

[Al Wahhaab]

When you get there, the future of Bitcoin is even more predictable than paper money. You know for sure that Bitcoins emissions are limited, which gives you a guarantee that you will not suffer from inflation. In addition, political instability or economic problems do not have an impact on the level of bitcoin

[Obolo]

There are lot of people who have entered into crypto oflate simply because, crypto is really changing the lives of some people. I would say more people in crypto has gone ahead to affect the price of bitcoin. This has made bitcoin more volatile in that, as the population in crypto increases, the demand on bitcoin somewhat increases. The situation of bitcoin is such that, if someone doesn't want, someone else will be available to buy.

[sino22]

I think, maybe the loss is in terms of Volatility. The total value of bitcoin in circulation and the number of businesses that use Bitcoin are still very small compared to what they should be. Therefore, small events, trade, or business activities can significantly affect the price of bitcoin.

[serjent05]

It is true. Since the value is very unstable, a person who decides to use bitcoin as a mean of payment must also take a risk and embrace this fact. Actually in the example you’ve cited it is not much a problem to market goods for bitcoin as payment, in my point of view, automatic conversion will do just like in fiat to local currency. This thing will only cause confusion to the costumers so if I will be asked, it still depend on the person if he is willing to take the risk or not.

[Thekool1s]

The volatility issue will automatically get solved once people start to peg things against BTC instead of USD etc. It's not rocket science. So instead of the guitar costing $100, it will cost 100 Satoshis. There won't be any volatility so to speak. But we are very far from something like this to take place. It will take a total economic collapse of sorts to make people realize that banking is a big fraud.

Actually, it is totally the opposite. More users will mean more 'stability'. You basically want to move BTC from whales to the average joe. Once that has happened it will result in a sort of 'volatility-free era', There won't be major price swings as we have experienced or will experience soon in the future.

[ngm22585]

I think the many stablecoin projects popping up are a result of the volatility issue, and could help to solve that aspect.

[Spaffin]

Bitcoin started off a tiny piece of plankton being sucked around by currents, maybe now it's a wee rowboat being smacked by the waves, by the time it's everywhere it'll be a supertanker with all the sluggishness that entails.

The more people and money that pour in, the steadier it becomes. One person who tries to initiate a major move will be eaten alive by thousands attempting to capitalise on it. In the great scheme of things volatility has barely wound down, but the potential number of people involved now may only be 1-2% of the future total.

I doubt it'll ever be steady enough for a pure BTC economy if people still have bills and costs to meet in USD, but then again I'm not convinced it'll ever be a currency.

Yes, most likely that the way it is. If a lot of people will participate in the cryptocurrency market, and the volume of transactions will increase, then people like Mt. Gox, having thrown 20,000 bitcoins into the market, it would have been very difficult to omit bitcoin in the price. Therefore, with an increase in the number of buyers and sellers in the cryptocurrency market, its price should be more stable. At the same time, I think that with an increase in the cost of Bitcoin, its volatility will also increase, since the amplitude of price fluctuations will allow it.

[pavka]

In my opinion, the problem of high volatility of bitcoin will be solved as soon as a way to limit the ability of whales to rock this boat is invented. Even a massive panic in the market does not have such a negative impact on bitcoin as selling several thousand Bitcoins from one wallet at a time.

[perla]

At least it got adopted, even more volatily as we know people have their different reason why they adopt bitcoin, for investment or to look on short profit. It is still better than no one adopt bitcoin and make it have no price anymore.

[coolcoinz]

More people does not mean more volatility. It's exactly the opposite. More people mean better distribution and this counteracts volatility.
If you have 100 units of something and 20 belongs to 1 person, 30 to another person and the rest is distributed among 5 other people. If each of these smaller holders sells the price will already move by a lot (10%) and if one of the big holders sell you could have a 30% swing. But what if each person got 1. 1 person selling would only mean a 1% move.