The volatility of Bitcoin; A merit or Demerit?

[CTO114]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

[kingstep]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

No asset lacks volatillity. the extent might differ but all of them experience volatility in their own way.

if bitcoin was not volatile, maybe it would have remained down and might not have worth what it currently worth. if it was too volatile,  investors would not have considered it to be an asset class because investors gets interested in asset that stands to give them profit.

The pros will now be that bitcoins volatillity brings more investors into buying it. the cons can be that the fear that bitcoin might go down because of volatility will hinder fearful investors from buying bitcoin. the ballance still makes the pros higher than the cons.

[Frankolala]

From the creation of bitcoin till date, the merits are far higher than demerits, because of the potential that bitcoin has. It solved the problem of double spending. Bitcoin is decentralized and censorship resistance which is a big advantage. Volatility is bringing more benefits for long term investors because bitcoin is a long-term store of value. Traders gnash their teeths because volatility a big disadvantage to them in the long run.

[Die_empty]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

Bitcoin volatility is not new. It will continue to draw the attention of newbies and those who see Bitcoin as a get-rich-quick rich. Experienced or knowledgeable investors and traders are aware that the price of Bitcoin will always rise and drop, so they don't panic when it happens. Historically, Bitcoin has been less volatile in the present bull season.

A volatile market gives investors the opportunity to buy discounted Bitcoin and make a profit when they sell later in the future when the price rises. The demerit of volatility is that it discourages people from using Bitcoin as a currency and as a safe-haven asset.      

[Cryptohygenic]

Do the merits outweigh the demerits?

Looking at it in the short term Yes it does but in the long run No and that is why traders are the most risky in the bitcoin market because they buys and sells at every short times while investors curbs the risk of lost by holding for the long term to give the market uncertainty much to and until then the price is up positively impacting their portfolio and shades profits, there is no other option than to keep holding and until then, the timing prospects for bitcoin investment will be unpredictable while long term goal is the keyword to be successful.

Would a less volatile nature draw more usage?

If bitcoin becomes less volatile, it will be more appreciated in the aspect of regular use for payments like the fiats which in time will encourage more adoption.

[Rruchi man]

To the trader, and investor respectively.

To traders and investors, it is something to leverage.

Would a less volatile nature draw more usage?

There is still usage currently, but not as a currency for most. We will possibly find out in time as Bitcoin grows, with its volatility reducing; it will mature and unlock another usage as a common currency for transactions in even offline spaces.

[d5000]

IMO Bitcoin has a larger potential for growth if its volatility continues to lower, and it is actually lowering as I wrote many times, e.g. in this thread.

This statement may sound like a contradiction, because of course volatility to the upside benefits the investors. But the problem is that an asset that stays volatile forever will always have massive profit taking cycles, as nobody wants to fall the falling knife and hodling can only be afforded by those who have excess money to spend.That could lead into investor exhaustion: some of those who invested in the "wrong moment" simply may not want to deal with the risk anymore and leave it forever.

That's a phenomenon we can see almost in all altcoins, they are more volatile than Bitcoin and thus they should be interesting for investors, right? But in the long term they are losing market share, because people prefer a slightly less volatile, but a bit more predictable asset like Bitcoin.

[Outhue]

Is there any asset that has no volatility? Even the world favourite gold do goes up and down in value, also stocks too, it will be boring if Bitcoin has no volatility, remember that downtrend actions creates buying opportunities and uptrend price action creates profit taking opportunities, I wonder what it will be like if these two doesn't exists with Bitcoin, it will definitely be boring. New buyers have the opportunity to accumulate when price is down, Nakamoto is a legend, it's a well crafted idea.

[TheUltraElite]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

The yearly volatility still remains under 20% - daily volatility might vary a lot.

For people who are selling goods for bitcoin, the number of such users still being very low, the problem is not that big. A 20$ article will cost almost the same even when the price of bitcoin drops by 1%. Otherwise adjustments can be done, still it is not that common and hence such adjustments are not seen yet being done by merchants.

For traders this is a time to buy/sell depending on the type of movement. But of course big capital should not be invested on during short term movements.

[peter0425]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

Do you think that bitcoin would have been valued as much now if it wasn't volatile in the first place and not gaining attention from investors? I am not saying that bitcoin's only purpose comes from its volatility but I can confirm that it did definitely help bitcoin reach the point where it is now. Besides, how would its volatility even be prevented? We can think about its volatility as something unique to only cryptocurrencies. We can admit that volatility can serve both an advantage and a disadvantage sometimes.

[OgNasty]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

I don't think Bitcoin's volatility is necessarily viewed in the right light by investors.  We are witnessing the death of fiat currency.  It is going to be a violent process with a lot of volatility and those involved are going to make and lose great fortunes as the world switches to a new reserve currency.  It has happened plenty of times in human history and it is never a clean process.  Don't expect it to be a clean process this time either.  Superpowers don't give up their superpower easily and being able to print as much money as you want without real consequence is a superpower.

[SilverCryptoBullet]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

Bitcoin market is there for everyone and if anyone can understand about the market, they can join it intelligently in order to get good profit. Bitcoin market is not different than other markets as it is a zero sum game that means in a same market, which is volatile or high volatile, there are people who lose money while there are the others who get good profit.

It explains how Bitcoin is good merit for some people and demerit for the others. Losers are more than winners so there are more people who see Bitcoin as demerit as they lose money in this market.

[m2017]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

If the bitcoin's price was constant (no volatility), then it is unlikely that this asset would have attracted so much general attention. By and large, the growth of bitcoin can be called volatility (although this is not entirely correct), just over a long period of time (from the moment of creation of bitcoin to the current moment).

Volatility over short periods of time (day, month, year, cycle) also creates "emotional swings" for traders and investors, attracting and tempting them to try to earn on these fluctuations.

It seems to me that if the volatility of bitcoin was less or constant, then this "asset" would remain a "toy for geeks".

And what is the point of evaluating the disadvantages or advantages of volatility? It is impossible to get rid of this quality of bitcoin anyway and should be taken as a given. Just "use" it.

[Apocollapse]

Not sure why you're still want to discuss about this topic when there were many thread talks about this:

1. Bitcoin Volatility: More of an Advantage Than Disadvantage
2. What are some Disadvantages Of Investing In Bitcoin
3. Seeing BTC volatility as a flaw, the newbies opium
4. Disadvantages of bitcoins
5. What are some disadvantages of BTC?

I would say if there was no volatility in Bitcoin, the system won't survive because miners might quit in 2014 because it's no longer profitable, in 2014 Bitcoin circulation already reach 13 Million.

[Josefjix]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

The demerit of Bitcoin can be solved by those that had had experience in the Bitcoin price pattern, those who has studied the network congestive nature to avoid spending higher fees and many more, sending Bitcoin to a wrong address, exposure to fraudulent attacks. All these are the demerit factors that newbies falls victim of.

[coolcoinz]

I'd say it's more of a disadvantage and lower volatility would probably increase the number of use cases for bitcoin, especially as a means of exchange.

Volatility is good for traders, but bed for everyone else.
Even in the most traditional sense less volatile assets are called more mature because they have greater market depth, which means more users. It's more difficult to cause panic among a million users than a thousand, right? So mature assets are also less prone to FUD and manipulation.

That said, we have to live with volatility because there's not much that can be done about it, but it's been getting lower and lower. Just look at the corrections in the 2017 bull market. We were seeing 30%+ drops every month. Now you maybe se it once per 6 months. Last time a similar event was in March and before that in August 2024.

[Z-tight]

BTC price will always be volatile, it is never going to be a stablecoin and have a stable price. The question is the level of volatility and how often it experiences spontaneous crash in price, that now happens less frequently, so volatility levels can be said to be reducing.

I don't see volatility to be a negative thing, it has not hindered the growth and adoption of BTC. Volatility would obviously be a problem for merchants who want to accept BTC, and they would probably need a payment processor, but volatility is not a problem for the average investor who wants to hold their coins to avoid inflation or an employee who wants to save for retirement in BTC.

[jackpotmaster]

It is a natural thing for an asset that is so new and its price is still being determined. It is neither a very bad or very good thing, it is something that must happen. It is simply not avoidable except in situations where there is complete price control, which itself would be a very bad thing.

BTC price will always be volatile, it is never going to be a stablecoin and have a stable price. The question is the level of volatility and how often it experiences spontaneous crash in price, that now happens less frequently, so volatility levels can be said to be reducing.

Stablecoins are also volatile so this comparison does not stand. 1 BTC is always 1 BTC, 1 USDT is always 1 USDT but both its values fluctuate.

[Floxynice]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

Well, it is disadvantageous because that is one thing that is reducing bitcoin's potential of being used as an everyday means of payment.

Apart from this, investors and traders love it. You buy when the price is low and sell when the price is high, giving you the opportunity to create wealth for yourself.

Volatility is part of bitcoin and we can't take that part away from it. Focus on how you can use that Volatility to your advantage like everyone else is doing. If you focus on the disadvantage, you might not appreciate this beautiful asset.

[ZAINmalik75]

The volatility (persistent changes in the price of Bitcoin) has drawn a lot of attention, and will continue to. The consequences surely has it's merits and demerits; to various users. To the trader, and investor respectively. Do the merits outweigh the demerits? Would a less volatile nature draw more usage?

No, I don't think a less volatile nature for Bitcoin or any cryptocurrency would draw more usage or attention. The reason why Bitcoin is worth more than $114k today, and had an all-time high value of $123k is because it's volatile, if it was less volatile, it would have a lower value, and if it had a lower value, it would have a lower adoption, and then the supply and demand mechanism wouldn't work the way it does at the moment. We know the reason why Bitcoin and cryptocurrencies are volatile, it's their supply.

Those who like making money from Bitcoin and cryptocurrencies would or should never say that their volatility has demerits because it's the volatility that's making them money, and they wouldn't be so interested into them if they weren't volatile, and when there is volatility, there will be both positive and negative volatility, and we will have to accept both.