The volatility in the price of a bitcoin is falling over time, or not.

[sapnu]

The volatility is going down because the number of users is going up. Isn't it obvious?

It's easy to make 100 people panic or get hyped at the same time. It takes more time and effort to do the same to a million people. Even harder to do to 10 million.

There are instances where bitcoin's value manages to stay high or low for a long period of time which means its volatility is decreasing. As we all know, volatility is the sudden change of price of bitcoin, it occurs because the market is experiencing massive changes that affects the price of a certain crypto in the process. You should know how to handle your holdings even at the times where bitcoin's volatility is high. Since its volatility is low right now, take it as an opportunity to prepare for any possible bull run or dump in the next few days.

[cheezcarls]

It is indeed falling and a good sign, but I don’t wanna be complacent on that. The cryptocurrency market is still considered high risk despite that the volatility went down. We can’t simply predict what would happen in the next few days or so, because the price can dramatically rise or drop in large figures anytime without warning.

[nemey]

With the covid-19 Bitcoin price tends to increase. And the volatility on Bitcoin can be said to be increasing in 2020. Currently there is a decline due to Christmas only. after that the price of Bitcoin will certainly increase again.

[jaberwock]

There are way too many holders these days which is the reason why volatility probably went down. The idea of bitcoin is simply the fact that fiat is always losing its value whereas bitcoin is scarce and limited which means it will not be infinite number of bitcoins, which means when dollar loses its value, bitcoin will gain value and in the long run bitcoin will always increase in price against dollars.

This is why there are more and more people who end up buying bitcoin and holding it, because they agree that in the long term bitcoin will increase in value but when they buy and hold they remove bitcoin from the market which leaves less and less money available in the market. When there is less and less money available in the market the liquidity drops and trading becomes a smaller part of the market.

[AndySt]

There are way too many holders these days which is the reason why volatility probably went down. The idea of bitcoin is simply the fact that fiat is always losing its value whereas bitcoin is scarce and limited which means it will not be infinite number of bitcoins, which means when dollar loses its value, bitcoin will gain value and in the long run bitcoin will always increase in price against dollars.
This is why there are more and more people who end up buying bitcoin and holding it, because they agree that in the long term bitcoin will increase in value but when they buy and hold they remove bitcoin from the market which leaves less and less money available in the market. When there is less and less money available in the market the liquidity drops and trading becomes a smaller part of the market.

A lot of asset holders does not automatically mean a decrease in volatility. In the current situation, a lot depends on the position of major players. Recently, it was reported that large players are guilty of the fact that bitcoin has not yet been able to strengthen at the level of twenty thousand dollars, because when the price approaches this level, large players sell a large amount of bitcoins and continue to transfer new portions of bitcoins to exchanges. We can talk a lot about the subsequent long-term trends, but at this historical moment in time, short-term factors still prevail.

[MCobian]

If we look at the graph in the opening post that the volatility in the price of Bitcoin has decreased, this is of course a good thing.
Because for Bitcoin to be a payment instrument, the Bitcoin price must be less volatile. And this is starting to come true. I believe
the reason is that more and more big investors are choosing to hold Bitcoin for long-term rather than making pump and dump.
Because nowadays Bitcoin holders are increasingly aware that Bitcoin is indeed a good for store of value.

[doomloop]

It will get even lower and lower in the future thanks to companies (or because of companies?) because these are companies worth hundreds of millions of dollars with each purchase, which means they are taking money out of the market and they do not make day trading stuff (most of the time) which means there will be less money traded each day.

We can't guarantee that they will stay, maybe tomorrow there will be a news of grayscale selling all coins they have, who knows? But it is certainly more guaranteed than regular whales. I remember mt.gox trustee selling 34 thousand bitcoins all at once to pay back people for example, that was something that made things more volatile, places like grayscale and microstrategy will probably not do stuff like that at all.

[iv4n]

The volatility is going down because the number of users is going up. Isn't it obvious?

It's easy to make 100 people panic or get hyped at the same time. It takes more time and effort to do the same to a million people. Even harder to do to 10 million.

There are instances where bitcoin's value manages to stay high or low for a long period of time which means its volatility is decreasing. As we all know, volatility is the sudden change of price of bitcoin, it occurs because the market is experiencing massive changes that affects the price of a certain crypto in the process. You should know how to handle your holdings even at the times where bitcoin's volatility is high. Since its volatility is low right now, take it as an opportunity to prepare for any possible bull run or dump in the next few days.

Prepare yourself for possible bull run or dump! What an advice, and how do you prepare for these two at the same time? You stack sats and dollars?! Or you sell one of your bags and hope that you made a right choice?

Actually Pixie85 has a point, more people and higher price can lead to less volatility! But in the end it's the free market, we are free to trade at any time, and we are doing that! Nobody can guarantee a stable price in the future, and let's be honest, who would like that? This volatility and people's interest is what drives the price, and it's one of the reasons why we believe in the higher prices in the future! We can have bull runs, drops, and all that fun in trading with stable price!

[slapper]

This is another piece of evidence that bitcoin has been set up to shoot up for a long time ago. The decline in the volatility makes the current uptrend more stable than ever. I have shown many proofs for the people who want to find a good asset to invest in. But the shadow of 2017 prevents them from having confidence in investing in bitcoin. Though, I have smart enough to have some bitcoins for myself. We also need to be careful since the index is going up for a short time. The more volatile the price is, the higher chance that a big dump will occur

I wonder where you get the chart? I have look around the Internet but there is no sign of such a chart like that. Very appreciate it if you can give me the sources.

[KaratX]

I saw similar charts a few years ago, and a lot of people back then tried to argue that volatility isn't going down and that it's actually increasing, but now it's even more clear that it's not true, and of course it makes sense that as we get more volume, and the novelty factor disappears, the volatility is bound to go down. Even if this bull market will make volatility increase, this volatility won't be as big as that of the previous cycles, so the trend is correct.

But it seems like if you extrapolate the line, the volaility will long-term stabilize at some level, like 10-15%, which also makes sense, because there's no price stabilizers like with fiat currency.

Crypto value will never be stable, Volatility can't be escaped and as time goes on bears will attack crypto market once again, everything feels like a round circle and we keep going around everytime, even if Bitcoin goes over 50,000$ it will always go back down, don't get carried away by the present rally, it won't last forever

[Vishnu.Reang]

This year, the maximum that Bitcoin went up or down was ~10%. This is much lower when compared to the situation we had a few years back, when spikes and dips of up to 30% in a single day were not that rare. However, the altcoins remain highly volatile even now. For example, Ripple recently lost around 30% of its value in a single day, as a result of the SEC lawsuit.

[so98nn]

Interesting to know this fact. It's wonderful that the volatility was 150% in earlier years and now its all the way down to 50%. I believe that this is the effect of increased prices?

I mean in earlier days it was far easier to move the prices of bitcoin from lets say 50 bucks to 150 bucks. That makes much more difference than the current one. For now it would take much more % of money to be injected in the market before the price can move up even by 2-3%. That's the main reason it has reduced so much.

I guess, if someone calculates the CoV at the given time point of 2010 and 2020, that would match mathematically in terms of money that is to be injected in the market of btc to move the price. Am I on the right track here?

[odolvlobo]

I guess, if someone calculates the CoV at the given time point of 2010 and 2020, that would match mathematically in terms of money that is to be injected in the market of btc to move the price. Am I on the right track here?

CoV measures the relative variability in the price over a period of time, but you are asking about liquidity. Although liquidity is a primary factor in volatility in a market, CoV does not measure liquidity.

[odolvlobo]

I wonder where you get the chart? I have look around the Internet but there is no sign of such a chart like that. Very appreciate it if you can give me the sources.

I created it myself with historical price data from blockchain.com.

[philipma1957]

It seems logical. The higher the market cap, the lower the volatility, because it takes a lot more money to vary the price. And in the future there will be even less volatility, as the price increases.

Yes this is exactly it.  The wealth  of the worlds investments is whatever.

Let us say 100 trillion
the wealth of Btc is now 400 billion

So more money is needed to shift it.

I remember prices as low as 6 dollars it is now 24,000 or 4,000 times bigger.


There is no way 24,000 x 4,000 = 96,000,000 a coin is going to happen from 2020 to 2028.

this would move the market cap from 400 billion to

160 trillion. since the worlds investment income is around 100 trillion now.


We are not going to grow to 160 trillion in eight years.

but I could see  10x to 4 trillion.

and the worlds wealth growing to 110 or 120 trillion by 2028.

At op very nice work.

[Argoo]

It seems logical. The higher the market cap, the lower the volatility, because it takes a lot more money to vary the price. And in the future there will be even less volatility, as the price increases.

I don’t think we need to agree that the price volatility of Bitcoin and other cryptocurrencies will decline over time. I think that next year 2021 we will be able to make sure of this. Bitcoin should rise in price and at the same time its high volatility will manifest itself. However, this also depends on many other factors. First of all, it depends on how its legalization by states and a general increase in liquidity will increase. In general, you shouldn't expect cryptocurrency volatility to fall in the future.

[adzino]

The volatility is going down because the number of users is going up. Isn't it obvious?

It's easy to make 100 people panic or get hyped at the same time. It takes more time and effort to do the same to a million people. Even harder to do to 10 million.

You sure this is because the number of users are going up? Care to explain? Because this isn't obvious for me .
Shouldn't it be the exact opposite since we have more and more users starting to invest every day. Like people would be constantly buying and selling to make profit, hence making it more volatile unless like the exact volume is being bought and sold which is almost impossible. Moreover new investors are more likely to create more volatility. I would say it is getting less volatile over time due to people getting a better understand of this technology.

[idrisalomagold]

Well, definitely it can be soon valued with centralized paper money at some point as time goes by. Volatility is decreasing as it may look for future price stability to act as next store of value. Institutions are running on storing bitcoin as their reserve funds. More retails will flow the market in the very next year - which started already. So, what do we expect on price action?

Hope that marker manipulators wouldn't do to further hurt the market, lmao...

[Xinarae*]

The volatility of Bitcoin prices has decreased over time the future of Bitcoin as a stable currency is much better and the price of Bitcoin will increase again as the supply is higher. Many times the market starts to go down before it goes up so there is nothing to be disappointed about. Bitcoin's volatility is growing and other countries and all their financial institutions, including the central bank, have started using Bitcoin. Which will further increase the value of Bitcoin and the market will not see their impact on anything.

[AicecreaME]

Bitcoin volatility has been lowered since there's a lot of Bitcoin holders especially these days, meaning, the lower the Bitcoin circulating in the market, the lesser the trade you could make resulting to a very small swings only. Based on the chart you provided, you could see that in the starting years of Bitcoin, many people are using in since it's price is not that big deal way back then, so I think what they've had in mind is it's okay to use it because it might never increase it's value.

But now, since Bitcoin is continuously making All Time High prices since it broke the resistance in $20,000, many people are holding it and hoping to sell it in $30,000 if we got there.