Is mass adoption or/and regulation more likely to reduce volatility?

[irhact]

As we know bitcoin is one of the most trusted cryptocurrencies and is considered the pioneer in the field. It has been in existence since 2009 when it was founded by Satoshi Nakamoto.
Reports suggest that as of February 2023, there are over 40 million people who own Bitcoin. There have also been discussions about regulating Bitcoin from various sources worldwide. On the other hand, volatility is one of the most prominent features of Bitcoin.
If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

The government can't regulate Bitcoin, if they can regulate it they would had done it since but because they have tried but can't that is why they're now speaking negatively against Bitcoin to discourage people from investing in it. Bitcoin is a decentralized currency and when something is decentralized it can't be regulated. Bitcoin has no center body that can be regulated to stop the volatility of the price.

If the centralized wallets and exchange finally gets regulated, it still wouldn't stop Bitcoin volatility because those exchanges and wallets aren't the ones trading Bitcoin on their websites and apps, it's the individuals that are responsible for determining the price of Bitcoin.

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[jokers10]

The government can't regulate Bitcoin, if they can regulate it they would had done it since but because they have tried but can't that is why they're now speaking negatively against Bitcoin to discourage people from investing in it. Bitcoin is a decentralized currency and when something is decentralized it can't be regulated. Bitcoin has no center body that can be regulated to stop the volatility of the price.
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The government can regulate connections to bitcoin in real world: when the one changes it to fiat, buys or sells something with it, etc. It can try to impact on miners which are under its jurisdiction. So it is not so easy to say that gov doesn't have any control over bitcoin, it only hasn't direct impact.

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would it reduce its volatility?

Look at the history of bitcoin: its volatility is already downing by time. The bigger its capitalization the lower will probably be its volatility if nothing bad will happen. It doesn't depend on a number of users directly, it depends more on a capitalization.

[posi]

The answer is no, volatility is not controlled by the number of adoptions that reach Bitcoin, that is to say, the number of people who own Bitcoin is not responsible for controlling Bitcoin in any way. Talking about government regulation of Bitcoin, how can government regulate something they don't control? The regulation that the government wants is on exchanges, platforms, and people who are associating themselves with Bitcoin; regulating the currency itself is something they really can't control.

So the adoption of Bitcoin grows beyond this level, and the government succeeds in reaching out to the majority of the people by regulating a few crypto exchanges and passing bills that people (let's just assume they agree to) agree to. Those laws and regulations only bind the government and the individuals involved, not Bitcoin directly. Just as you have said, volatility is the nature of Bitcoin; it's part of what makes Bitcoin Bitcoin, so it can't change. We will always have a drastic change in price; that's one thing I know will never change with Bitcoin. No volatility means Bitcoin will be stable.

They cannot control the bitcoin network, but with regulations that will be imposed on centralized exchanges, and centralized exchanges are the places that hold the most bitcoins. Furthermore, all information about the market as well as the bitcoin price is displayed on centralized platforms, so I think they will still have some control over the volatility of bitcoin. Bitcoin is decentralized but used by everyone, and most of the participants in this market mainly depend on centralized platforms. The government doesn't control bitcoin, but they can control bitcoin users.

[Dr.Bitcoin_Strange]

What is likely to reduce the volatility as what I've read before is whenever Bitcoin reaches the maximum supply. But how long do we need to wait for that? Estimated 2140, one hundred years and more from now.

I don't think anyone in this forum would be alive by then; rather, everyone on this forum would obviously be new people then, and I think there would still be more people into Bitcoin by then compared to what we have now. Looking at what is happening now, volatility is not just pulled by halving and increasing supply, so by then, volatility will not still be dependent upon total supply. So, it's unlikely.

You know what I think, @OP and @livingfree, If the total number of Bitcoins holders reduces, like to the extent where Bitcoin is allowed to only be in the hands of a few whales, exchanges, and rich people, then these people can fully manipulate the price of the Bitcoin, but I don't see anyone giving up on accumulating Bitcoin. If people are selling off each day, that's how more people are also buying up. (I may also be wrong in my thoughts.) So, the government can fucking put any rule and try what they can, but Bitcoin can never be in their hands to fully control, nor can they control volatility.

[Z390]

Reduction in volatility? I am not so sure because people will always need to take profit and only very few will decide to keep their Bitcoin and never sell, the poverty rate in the world is extremely higher and assuming all people in the world now buy Bitcoin they will always need to sell and also bear market can't be erased of crypto market because higher price always follow by correction.

The higher the adoption of Bitcoin the more value it will has but also there will be massive dump too because too many numbers of people need money, so when they are able to turn 200$ into 400$ through Bitcoin they will need to take profits.

[Awaklara]

If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

the government might be able to make a regulation that will bind the use of Bitcoin. but not with Bitcoin price volatility that they can control.
everything depends on the market. when more and more adoption and with a limited supply will make Bitcoin still not be controlled by anyone.
Bitcoin is not going to be a stable asset, even in my opinion if Bitcoin will reach the maximum available supply it will be traded on the market. its value will also be uncontrollable.

[Rruchi man]

On the other hand, volatility is one of the most prominent features of Bitcoin.

Bitcoins volatility and the potential to make profit from it is what has attracted many people to bitcoins, no doubts! but you also need to remember that the primary purpose for which bitcoin was created was to be used as currency not really investment. At some point along the line as bitcoin progresses the volatility is bound to reduce, what will should really be asking is, at that time, will bitcoin still be able to attract people? and will those that are owning bitcoins because of it's volatility, will they choose to keep their bitcoins, will they decide to sell it all, or even trade them for some more volatile Altcoin?

These are many questions to consider about reduced volatility.

[vv181]

Unique addresses do not mean each person owns one single address. There is no rigid way to determine bitcoin owners or users solely based on filled addresses. One person can own many addresses, they also can fill them as they wish. If the stat researcher uses that kind of methodology, that is a sure way to tell it is an unaccountable statistic.
We can't know for sure how many people exactly own and uses a Bitcoin due to its pseudonymity nature. It is hard to tell.

Anyway, back to the main idea of the topic, if we take a look at bitcoin market capitalization, it is extremely minuscule compared to other assets or commodity, so it is expected in case many more people use its utility and specifically owns it, the volatility changes will be reduced.

[pooya87]

volatility is one of the most prominent features of Bitcoin.

Volatility is what happens in the market, it is not a "feature of bitcoin"!

If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

More adoption will reduce the volatility, as we have seen so far. You can't compare the volatility we have today with what we used to have in 2010 for example, it has been reduced. Extrapolating that, things should be more stable as the adoption grows.
But as for the regulation, it is not going to affect volatility. It is done by the government to have more control and be able to monitor people's finances. Not to mention that the market is already regulated with all the KYC that the exchanges enforce.

[rat03gopoh]

There is almost no hope of being stable as long as supply is limited and not backed to something of stable value. Even all stable assets that people believe in actually have volatility even though it is relatively small.

If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

Btw, what does adoption mean from your perspective?
If that includes trading bitcoins on centralized exchanges, then obviously that is a forerunner of volatility and traders actually want that.

[DaveF]

The more adoption happens loud hell things will become. Just because more people mean more trades what less dramatic trades as it's impossible to spike the price in either direction as there will be more people either side of the spike buffering it.

However, regulations are entirely different aspect. As regulations are proposed there will be more volatility as people try to figure out what's going on and try to make money bye bedding one way or the other about how the regulations will check the price. As regulations take effect, once again people will be betting as to what happens and will put a lot more pressure on the coin maybe either direction increase in volatility. And then the third stage would be after the regulations have been in effect for a while and people know what happens, they will help reduce volatility as it shows that BTC can be come a normal thing in commerce.

As always, not investment advice, just my opinion.

-Dave

[Z-tight]

volatility is one of the most prominent features of Bitcoin.

When Satoshi created BTC, he didn't add any "feature" such as volatility, even with all the upgrades and developments in the network, there's no additional "feature" such as volatility. BTC is a currency and factors such as its fixed supply and the demand for it makes it volatile, not that volatility is part of the algorithm or protocol .

If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

If there is more adoption and more strong hands than weak hands, volatility will reduce. There are so many bitcoiners that sell with any small price movement or fud, or those that only buy because of fomo, these people cause quick price movements. But i believe with greater adoption, and more people actually spending and holding BTC without panic, volatility will reduce.

[LogitechMouse]

Who wants here that Bitcoin will reduce it's volatility? Not me definitely.
I don't want the volatility of Bitcoin to be reduced because that's where the money is. Volatility makes an average investor a millionaire. Volatility makes an investor who has a billion dollar a millionaire (you know what I mean ).

Anyway, more people will definitely reduce the volatility of Bitcoin, but will regulation have a big impact on reducing the volatility of it? I don't think so, and aside from that, who wants Bitcoin to be regulated anyways? Overall, I don't think that there will be a time where Bitcoin will become volatile because many people see Bitcoin as an asset, and one nature of an asset in general is it's volatile, but as we see more and more people using it, we might see the volatility of it reducing little by little. So little that we aren't feeling it at all.

[jeraldskie11]

Because Bitcoin has a limited supply, the only way to lessen volatility is for the market cap to rise. Because there is no effect on the market if there is a large marketcap when someone is going to sell their altcoins/Bitcoins. I believe that mass adoption and regulation will contribute significantly to the expansion of marketcap since it can bring more investors to the market.

[Findingnemo]

As we know bitcoin is one of the most trusted cryptocurrencies and is considered the pioneer in the field. It has been in existence since 2009 when it was founded by Satoshi Nakamoto.
Reports suggest that as of February 2023, there are over 40 million people who own Bitcoin. There have also been discussions about regulating Bitcoin from various sources worldwide. On the other hand, volatility is one of the most prominent features of Bitcoin.
If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

Even 200 million is nothing compared to the population of the world which is probably around 8 billion by the time we reach the 200 million active Bitcoin users, the volatility will remain same and I expect it to be lot higher cause the numbers in Fiat will be the difference when daily volatility rate reaches upto 10% on average.

[hatshepsut93]

If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

Governments would need to restrict high leverage trading and fight wash trading and other methods of price manipulation, and this needs to be a global initiative, because if only a few countries do it, then traders would just create volatility through offshore platforms. I think such regulations are not realistic, governments don't care that much about Bitcoin, and actually, what is for them to gain in making Bitcoin less volatile?

Adoption somewhat reduces volatility, but only to a certain point. If people buy Bitcoin and hodl, they are not really reducing volatility.

[darkangel11]

Regulation is definitely more effective to reduce volatility,

I guess you mean volume, not volatility.

Regulation usually means restriction. There's going to be licenses, fees, government intervention into trading and private business that will discourage people from choosing cryptocurrencies which will result in less people using them. Volatility will still be big because what's stopping someone who already has bitcoin to dump it when regulations keep piling up?

Because Bitcoin has a limited supply, the only way to lessen volatility is for the market cap to rise. Because there is no effect on the market if there is a large marketcap when someone is going to sell their altcoins/Bitcoins. I believe that mass adoption and regulation will contribute significantly to the expansion of marketcap since it can bring more investors to the market.

This is one of the ways, but not the only one.
Another way to reduce volatility is to distribute bitcoin among many more users. If you have 20 million bitcoin owned by 1 million people, the volatility is going to be much higher than in a case of the same number being owned by 3 million people.

[serjent05]

As we know bitcoin is one of the most trusted cryptocurrencies and is considered the pioneer in the field. It has been in existence since 2009 when it was founded by Satoshi Nakamoto.
Reports suggest that as of February 2023, there are over 40 million people who own Bitcoin. There have also been discussions about regulating Bitcoin from various sources worldwide. On the other hand, volatility is one of the most prominent features of Bitcoin.
If more people adopt Bitcoin (e.g., 200 million people) and the government succeeds in regulating Bitcoin to some extent, would it reduce its volatility?

I think mass adoption will more likely have a bigger impact in terms of reducing the volatility of the Bitcoin market.  The reason behind is that the more people get involved and invested in the Bitcoin market, the more liquid the market becomes and the more resistant the market is to price swing since there are more funds injected into the market that created more resistance to flash crashes.

[The Cryptovator]

Bitcoin gained popularity rapidly primarily because of its inherent volatility. However, this very volatility prevents it from achieving stability, regardless of whether it experiences widespread adoption or stringent regulations. The decentralized nature of Bitcoin also presents challenges for regulatory measures, making it difficult to effectively regulate. On the other hand, Bitcoin readily adapts to changing circumstances, which means that increased adoption tends to result in more volatility rather than stability, in my opinion. I have observed that decreased volatility is usually attributed to lower levels of adoption.

[Texac]

Reduction in volatility? I am not so sure because people will always need to take profit and only very few will decide to keep their Bitcoin and never sell, the poverty rate in the world is extremely higher and assuming all people in the world now buy Bitcoin they will always need to sell and also bear market can't be erased of crypto market because higher price always follow by correction.

The higher the adoption of Bitcoin the more value it will has but also there will be massive dump too because too many numbers of people need money, so when they are able to turn 200$ into 400$ through Bitcoin they will need to take profits.

We are talking about reducing volatility, not bitcoin will be completely stable.  but mass adoption or regulation, I don't think it will affect the volatility of bitcoin.  bitcoin will only become more stable as it has a larger and larger market cap. in recent years when the capitalization of bitcoin has increased significantly, the return of bitcoin is not as large as in previous years, so I think bitcoin will be less volatile and more stable at some point.