Why Bitcoin price is so volatile? What are the major factors that drive it?

[Kasabus]

I am wondering why Bitcoin price is much more volatile than the stock market?

You've been here in crypto since last 2017, and that kind of volatility is already known to everyone. But just to wonder why it surprises you because we have this thing all the time and since the day it was been in the market.

Asking for a reason? There's a lot and we can't change this feature anymore. And as the number of crypto users (traders/investors) increases, the more it becomes volatile but I think, majority love to see this and this is also the reason why these people make money from here.

[Burdec]

I am not sure as what is the major factor that affects the volatility of the prices but I think that speculation of the market prices is one of them because with speculation, trades are continuously happening which means that there is a lot of buying and selling which affects the supply and demand which is the direct reason for the prices of bitcoin which means that the more the trading volume, then the more the volatility will be. We don't have to worry about volatility though as it is present in almost any markets, its just that bitcoin market has a more prominent and noticeable price changes.

Speculations with money are obviously one of the major factors but to my mind the another one major factor that stimulates all investors to buy BTC is their greed. People desire to earn more and more money so they insanely trade.

[bitgolden]

Most traders lose money and it's down to this fact, that people in there, retail ones anyway, all react when they know they're not supposed to. It even happens to big funds too since they rely mainly on individuals to broker their trades on the floor. Panic, reactions, regret, fear, bad decisions.

Buying the socalled dip isn't a great strategy for shitcoins either. Trust me, I learned this the hard way!

The weird thing is, most people who sell lose money because in the long run only the holders win money by the looks of it. How? Well let's say there are people who constantly buy and sell, and they rarely hold bitcoin, only thing they do is buy or sell and keep doing that and keep their money in fiat, and there are people who buy and hold, that means people who hold will always be in profit and people who bought and sold will be in a loss even if not real loss it would be loss or potential profit.

It is weird because it doesn't matter where you end up selling your coins, you will always make a profit, and that is why selling is a bad idea but the dilemma is that if you are never selling that means it also worths nothing as well, if I am not selling or using it, if it is just there doing nothing, it doesn't help me a bit, only if I sell. That is why I consider selling only if I have enough to become rich.

[tvplus006]

The weird thing is, most people who sell lose money because in the long run only the holders win money by the looks of it. How? Well let's say there are people who constantly buy and sell, and they rarely hold bitcoin, only thing they do is buy or sell and keep doing that and keep their money in fiat, and there are people who buy and hold, that means people who hold will always be in profit and people who bought and sold will be in a loss even if not real loss it would be loss or potential profit...

I think there are 2 reasons for this, one of which is that the trader sells BTC in the hope of buying it at a lower price and making a profit on the price difference. The second reason is that there is a lack of confidence in the stability of bitcoin and the investor is afraid of its depreciation, as it was in 2017.

[MCobian]

The factor that causes the price of Bitcoin to be volatile is because there is no regulation from the government, and Bitcoin price movements move
based on supply and demand. Which cannot be controlled, this makes the price of Bitcoin often manipulated by whales who do own large
amounts of Bitcoin. In my opinion it's not a bad thing that the price of Bitcoin is volatile, because for traders who have good analytical skills,
can take advantage of the volatile Bitcoin price to generate profits.

[lixer]

I believe that unregulated markets will always be volatile, because there is no stable situation in human nature, we always like to play big and make big decisions, because we do not want to make 10% per year and get rich in 30 years, we want to get rich right away today.

Oh well said, and I really like the word "unregulated" because once the markets are being controlled and regulated, stability is attained but the possibility of growth also reduces to a large extent. I laugh at the prospect of a government controlled crypto coin because it is more like banks moving to blockchain but still not accepting decentralization.

It'll be impossible for bitcoin to be stable, it could lose the heat of it's volatility  but it won't be lost completely since that's what makes the market very attractive.

Yes but like there are stable coins and even they have a tiny bit of volatility associated with them but it's rather negligible and I am afraid with time and more adoption we will actually lose the volatility aspect of bitcoin completely.

Once the uncertainty or volatility is vacuumed out of the bitcoin market, it just becomes the stock market.

[jack05]

Bitcoin is volatile because of its non-regulatory nature. There are many myths about volatile nature of bitcoin, one is that people who bought huge no of bitcoins in 2011-2014 are now in position to manipulate the market.

[darewaller]

If you’re going to be comparing this $1 trillion market to stock markets that are worth more than that, then you’re going to be wrong because the level at which the stock markets operates is way higher than this one. Crypto is still new, and stability is one of the reasons people wanted institutions to be part of this crypto community, and we have seen a few of them making moves to join the market by investing huge sum of money.

With time we are going to see where this leads to, whether we are going to have more of them being part of the market. MicroStrategy has been one of the institutions investing big time in the market for their rich clients. Maybe if we reach a certain level the market will stabilize.