Why is the price of Bitcoin variable and can it stabilize?

[Alikhaki123]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

[funsponge]

It is a new currency think that fiat has been around for a long time Bitcoin has been around for a little over 10 years. Bitcoin also has a way of injecting new Bitcoin by mining which causes a little unpredictability in the short term because of the amount that is rewarded each block reward but this will reduce in the future helping stabilize Bitcoin. There are also different types of investors atm some are looking to buy into Bitcoin but sell at the price that they define as their target and that causes instability in the market. This should reduce in the future when more people are using Bitcoin as a currency instead of investing to make a profit in fiat.

[NotFuzzyWarm]

As a 1st post, you need to remember to actually ask a question in your posts and postulate a reason you think things might be as they seem to be. That will open the door for discussion of your reasoning. Just because the title is a question does not make it clear to folks who do not use English as their primary language...

That said, BTC is the same as any traded item. Do stocks, bonds, metals, FOREX, etc have stable prices? No. Prices for them all goes up and down all the time based on a myriad of factors.

[franky1]

ways to stabalise the price

1. add circuit breakers
if the price moves more than 1%. freeze the market. stop processing orders
fiat markets do this

2. add more decimals/significant figures
instead of only allowing orders at say $45,704.52 and next possible orderline $45704.53
have it where it allows orders at say $45,704.520 and next possible orderline $45704.521
allowing for 10x more orderlines per cent. meaning takes more orders to get to higher prices

3. ban bots

[bitmover]

That said, BTC is the same as any traded item. Do stocks, bonds, metals, FOREX, etc have stable prices? No. Prices for them all goes up and down all the time based on a myriad of factors.

Just like other currencies.

Not even USD has a stable price. Just look at USDEUR charts, for example:



Ofc bitcoin has a much higher volatility because it is a really new type of asset.

On the other hand, fiat currencies have a very high volatility as well. If you take a look at USD BRL (Brazilian Real) the volatility is very high. In 2020 alone, BRL lost about 38% of its value against USD

[Woodie]

First reason is obviously it's an unregulated asset which can't be controlled in the same way as we see with fiat.

The other reason which needs no introduction is market manipulation,  this is one of the reasons price of Bitcoin moves in an undecided manner as a result of this market play.

I should also say bitcoin is speculative hence price responds to what people are saying about it, we have see how Elon tweets about crypto once these stories catch the wind it's up or down for crypto.

[teosanru]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

One reason a lot of people talk about is adoption. Because the adoption of cryptocurrencies has been relatively low until now, therefore, with new adoption the price starts to shoot up thereby creating huge volatility, but the actual truth due to which volumes remain uncertain in the market due the concentration of the market, Here the big money is controlled by just a handful of people and retail investors aren't that strong which means the market can be easily moved a lot by one person if he decides to sell, these whales work in combined groups, therefore, making the market even more volatile, recently FIIs have also entered the market which means they also can single-handedly dictate huge stakes in this market.

[Shenzou]

Different to regular currency, bitcoin is not controlled by a government or an economy that influence its price, bitcoin's price is controlled by the people who are buying and selling it and also there constantly new bitcoin being mined and all of these affect the price plus since it is still a fairly new concept we are constantly seeing some good news and some others that are bad from government banning its use to big companies accepting it as a payment method.

[Fortify]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

Nobody can say for sure what causes particular move day to day, in general however there is a huge amount of extremely "cheap" money floating around right now. If you have millions in the bank in certain countries around the world - the interest rate has gone negative. Which means the bank charges you money to store it (because the central bank wants to force people to spend money) instead of normal where the bank would pay you small amounts for keeping your money there. If you force the super rich to take their money out of bank accounts, it goes into all sorts of other assets and investment funds which try to earn a positive return. However this runaway train of money has happened many times before and eventually it will drive into a recession - they tend to get more powerful as we move along in history and lots of governments have abandoned any fiscal responsibility.

[blockman]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

Hi, welcome to bitcointalk, Ali. There might be some illiquid markets for altcoins but if you're talking about bitcoin, it's very well liquid and the rise and fall that you usually see is just all about its main nature, volatility. As for the public trust that you've said, there's already public trust in bitcoin because if there's none then El Salvador won't declare it as their legal tender. As of now, it's the only country that deals with it as a legal tender but there are also many countries that do support bitcoin as they are not stopping their citizens to engage with it.

[Ryker1]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

Well I think you should need to read more here before posting, that has been asked so many times here.
It can't be stabilized just because with this basic reason, it has a fixed supply that makes the price fluctuate every now and then, there are too many transactions in trading that always involve bitcoin on an exchange, there are too many people transferring their bitcoin into another wallet, many of us a cutting profit when there is a bull trend in the market and those are can create a wave on the price. Plus, bitcoin did not back any currency not like like USDT backed by USDT coins which are purely stable ones.

[Smartvirus]

~snipe~

It's your first post for sure and you've not done anything wrong by making a first post, especially one that is valuable and I'm not sure this one is entirely. When you come to a forum @OP, it's always best you first look out for the rules that binds the forum and also, you seek to understand the environment before in order not to make much of a mistake.

Perhaps this post is best suited here but, you don't seem to have familiarised yourself with the forum before you started posting. Your topic of discussion as at is now is one that has been talked about one roo many times and all you could have done is just to search it out. You've got ideas alright but, you've got to acquint yourself with the bitcointalk environment.

[B-Bit]

Prices fluctuate because someone is constantly buying and selling.
There are more and more people who trust Bitcoin, which will lead to more and more Bitcoin prices and higher values.
At present, it cannot be stabilized. In any case, there will be fluctuations.

[andeluna]

Prices fluctuate because someone is constantly buying and selling.
There are more and more people who trust Bitcoin, which will lead to more and more Bitcoin prices and higher values.
At present, it cannot be stabilized. In any case, there will be fluctuations.

I agree with you bitcoin can't be stabilize because at first bitcoin is made volatility to be more valuable and have a higher value compare to a fiat currency. The reason why It can never be stabilize is the supply for example , one country have a population of 2 billion people and the supply of bitcoin is 21million and have a stable value of 1 bitcoin is equal to $1000 for example, do you think it will last ? obviously not.

[NathanielParker]

Novices can learn more about the rules after entering the forum, because some issues may affect your posting.
But this is impossible. Currency was originally a set of contracts. Cryptocurrency is more non-national and is issued in a decentralized manner. In other words, it does not have an institution like the central bank to maintain currency stability.
Bitcoin itself is a closed issuance mechanism and cannot maintain the stability of the currency price.

[Kimberl2020]

Because of these reasons, the price of Bitcoin is erratic：

1. Cryptocurrency is priced entirely by supply and demand.

2. Price fluctuations are entirely market behaviors.

3. There are no restrictions on the ups and downs of the cryptocurrency market, which is different from the traditional stock market.

4. Relative to the mature financial market, it is still at a very early stage and will be in the early stage for a long time.

[realcrypto]

Even though bitcoin gains public trust it cannot stabilize because the price is driven by demand usually generated by mainstream news at a particular time. People are also investing in bitcoin because the investors know the price is not stable hoping to make profit with long term or short term holding.

[witcher_sense]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

In short, the price of bitcoin is volatile because the price is being continuously discovered on a free market. The market as bitcoin itself is open for everyone, you can trade it 24/7/365 without any permission, license, passport, etc. The only thing you need is a device, with which to access the Internet. No one knows what the "real" price of bitcoin should be. Given that more and more people are entering the field, demand for bitcoin fluctuates considerably and unpredictably. Will the price ever be stabilized? I don't think so. Bitcoin is by design deflationary currency, its price can grow infinitely as more and more people start using it, more and more products are produced, more and more lost private keys with coins there are due to errors and poor custody.

[Dread Pirate Roberts]

Hi I am Ali and this is my first post on Bitcoin Talk.
Because the bitcoin economy is new, its new nature, and sometimes illiquid markets, the price of Bitcoin can increase or fall unforeseenly in a short period of time. But with the increase in liquidity, this market can gain public trust, as can Fiat currencies, even though it is not of a physical nature.

the currency is never stable. what distinguishes crypto from other assets is the fluctuating price. then it is more appropriate to call it a commodity asset. because supply and demand also affect the price of bitcoin. and in my opinion this actually gives a unique thing to the characteristics of bitcoin.

[Mr.sprin]

indeed, basically the price of bitcoin or altcoin is not stable, the price can change at any time according to market demand, if there are many who buy, the price is likely to go up and if many sell, the price will fall, usually many people will buy the coin if there is good news, for example, a coin notification will in listings in large markets, for example on the Binance market or other positive issues, the coin price will be expensive.