The volatility of Bitcoin; A merit or Demerit?

[Fiasem20]

In my opinion, everything has its advantages and disadvantages, and each thing is unique in its own way. Interestingly,many people view Bitcoin's volatility as a risk. However, considering its consistent appreciation and all-time highs over the years,it's clear that this volatility hasn't deterred long-term investors.In fact, Bitcoin has proven to be a reliable store of value in the long run.While day traders who closely monitor price movements may see volatility as a risk,long-term investors tend to remain calm amidst price fluctuations.
Even traditional currencies,which are considered stable, can lose value due to their unlimited supply.Therefore, Bitcoin's volatility doesn't bother me,as I'm a long-term investor,not a day trader.

[headingnorth]

Re: The volatility of Bitcoin; A merit or Demerit?

If you can't handle the volatility then forget about bitcoin, just keep your money in a nice safe high-yield savings account.

People who ask such pointless questions are expecting to get high returns without any of the volatility.
But there is no such thing in life. These people are living in fantasyland not the real world.

If there was such a thing as high returns without a lot of volatility then everyone in the world would be a billionaire already.

[Danica22]

But maybe in the near future is won't be as volatile as we have seen today. Perhaps when we reaches that almost all Bitcoin has been mined, it could be that the price could go a stable flatline as the 1% won't be mind for the next 100 years or so.

If bitcoin gradually becomes more stable, it means that the profits from it will also decrease and become significantly smaller.

If bitcoin becomes less volatile, it will be able to attract many other large investors, who like stability but at the same time, those who like high volatility will no longer like it.

The blunt truth is that we like bitcoin not because of its decentralization, but because we like its volatility. Because it gives us more opportunities to earn more profit.

[famososMuertos]

It's not inherently good or bad (a merit or Demerit). Perhaps in the long term, we could get into a debate about this, since when an asset's volatility decreases, it might make more rational sense at that time. Non-volatile assets are "boring" for investors.
 
The situation with Bitcoin is the sheer magnitude of its volatility. Currently, in the traditional market, an asset with 5% volatility is considered desirable, according to the spot market. Therefore, if an asset's volatility is disproportionately high, the question arises: Is this a merit or a demerit?

  you get the point!?

[el kaka22]

Many people would consider it a merit because they are traders, and volatility allows people to make money without having to wait for it. When something is volatile, it means we are going to see it be a lot better. That is why it's crazy easy that we are going to make money from all the ups and downs. Obviously long term holders like me do not like the volatility, because it is boring and doesn't give us the return that we want.

So, it is not really a clear answer for anyone, we do not have that type of same result for every person, some will say volatility is bad and some will say it's great and we will not really face with anything that is risky or changing at all. So we should focus on what we personally believe, and stick to that.

[viljy]

If we consider bitcoin as a commodity, which it is de facto (now de jure, since all cryptocurrencies are recognized as commodities according to Trump's decree), then volatility is a merit. If we consider bitcoin as a form of money, then volatility makes settlement operations somewhat difficult. In particular, this was one of the reasons for the appearance of stablecoins. Other reasons were the needs of exchange trading, and the need to preserve value (in cryptocurrency form) during bearish cycles.

With time, it won't affect BTC that much, even less than it does now, and even more so from the days we already saw.

The turn is now on those to implement the wider adoption for BTC to become that good alternative for fiat money and to be used in that way..

I agree. Bitcoin's volatility will certainly decrease in the future. By the way, I had this thought about it. Indeed, even now, the volatility of bitcoin is less than the volatility of exchange rates against the dollar for some currencies over the past year or two (offhand, for example, the Turkish lira), or at least at the same level. So in this sense, bitcoin has performed well.

[Mpamaegbu]

As a trader, the volatility of Bitcoin is what I need to make money in the market. Either up or down, a skillful trader will always find a way of making money. Trust me, no trader likes a sleeping or dull market. You don't want to be in the market for longer than necessary just to watch paint dry because price is crawling. Trading thrives better in exciting market than one dominated by boredom.

As an investor, I won't get so much concerned with volatility because my eye is set on exit or TP (take profit). Whether price does it crawling there or it rushes to get there, what matters to an investor is where they've their target for exit set.

[SilverCryptoBullet]

As a trader, the volatility of Bitcoin is what I need to make money in the market. Either up or down, a skillful trader will always find a way of making money. Trust me, no trader likes a sleeping or dull market. You don't want to be in the market for longer than necessary just to watch paint dry because price is crawling. Trading thrives better in exciting market than one dominated by boredom.

Nobody is skillfulin anything if they don't learn and practice so it's the same with trading. Traders must start as newbies in trading and in the volatile market but they must learn about trading, the market, and actually practice trading from demo trading to actual trading with their money. It requires considerable practice and decent time in order to become skillful and experienced in trading.

This means risk through practice, you can lose decent amount of trading capital and if newbie traders are not careful, they can lose all their fund in trading. If they fall into this terrible trading adventure, their life will be destroyed and that's bad ending.

[fuguebtc]

Bitcoin is a decentralized monetary protocol and money. Money has only three uses a medium of exchange, a store of value, and a unit of account. These are the only three uses of money, and Bitcoin can be used for all of them.However, many people do not understand Bitcoin and treat it as a speculative asset instead of a superior form of money suitable for long-term savings.
The advantage is that you can buy cheaply when many dumb investors are selling. It’s true that volatility scares many normies, but once they realize that Bitcoin only grows, and when it surpasses one million dollars, the volatility will decrease and more normies will start using Bitcoin.

I believe it's not that people don't understand, but they don't want to use bitcoin as a currency because it doesn't bring as much benefit as using bitcoin as a speculative asset. What good is a private, decentralized currency if we are not rich, do not have much money? Do you see any poor people who care about privacy and how does it benefit them? So there is nothing wrong with bitcoin becoming and being used as a speculative asset rather than a currency.


It is true that as bitcoin gets bigger, it will become more stable, but you need to know that if bitcoin reaches 1 million bitcoin transactions will become very expensive. So I don't think normies will use bitcoin as currency at that time.

When bitcoin hits 1 million, bitcoin will be reserved for the rich and used as a safe haven instead of a currency.

[purple_sparkles]

Bitcoin is a decentralized monetary protocol and money. Money has only three uses a medium of exchange, a store of value, and a unit of account. These are the only three uses of money, and Bitcoin can be used for all of them.However, many people do not understand Bitcoin and treat it as a speculative asset instead of a superior form of money suitable for long-term savings.
The advantage is that you can buy cheaply when many dumb investors are selling. It’s true that volatility scares many normies, but once they realize that Bitcoin only grows, and when it surpasses one million dollars, the volatility will decrease and more normies will start using Bitcoin.

I believe it's not that people don't understand, but they don't want to use bitcoin as a currency because it doesn't bring as much benefit as using bitcoin as a speculative asset. What good is a private, decentralized currency if we are not rich, do not have much money? Do you see any poor people who care about privacy and how does it benefit them? So there is nothing wrong with bitcoin becoming and being used as a speculative asset rather than a currency.


It is true that as bitcoin gets bigger, it will become more stable, but you need to know that if bitcoin reaches 1 million bitcoin transactions will become very expensive. So I don't think normies will use bitcoin as currency at that time.

When bitcoin hits 1 million, bitcoin will be reserved for the rich and used as a safe haven instead of a currency.

It seems to me that bitcoin is now used more as an investment than as a currency, since the possibility of convenient payment with bitcoin is not yet so widespread. But as an investment, it is a very good option, and its high volatility is a good opportunity for this.

[Publictalk792]

Fluctuation of price of bitcoin is matter of great concern as it has impact on different individuals. These price movements will favour these traders since they afford them opportunities to reap profits. In long term there is fear in up and down as this is opportunity to purchase more Bitcoin at lesser price. But to individuals who wish to use Bitcoin as unit of shopping, fluctuation in price is huge burden since person would not like to spend money that would lose their value on next day. More stable price would probably mean more people using Bitcoin but its unpredictable price is what is so alluring and lucrative to those that are not afraid to take risks.

[Mpamaegbu]

~

Nobody is skillfulin anything if they don't learn and practice so it's the same with trading. Traders must start as newbies in trading and in the volatile market but they must learn about trading, the market, and actually practice trading from demo trading to actual trading with their money.

That's the ideal situation – learn and practise before venturing into something. Ironically, it's the other when it comes to trading according to perceived notion by some that trading is a shortcut to wealth. It's sad as many a trader just want to jump into trading without acquiring the set skills for it. Those who've that mindset of course get battered and disappointed after they suffer severe losses in torrents. Trading, like engineering, law, medicine, pharmacy, driving, journalism, just to mention but six, is a profession like many other that should be handled with seriousness and focus it demands.

If they fall into this terrible trading adventure, their life will be destroyed and that's bad ending.

Actually, the down fall of a man isn't the end of his life. Those who suffered losses as beginners still have opportunities of bouncing back if they're so determined. There's no profitable trader today who didn't pass through losses while starting off.

[₿itcoin]

Many people would consider it a merit because they are traders, and volatility allows people to make money without having to wait for it. When something is volatile, it means we are going to see it be a lot better. That is why it's crazy easy that we are going to make money from all the ups and downs. Obviously long term holders like me do not like the volatility, because it is boring and doesn't give us the return that we want.

So, it is not really a clear answer for anyone, we do not have that type of same result for every person, some will say volatility is bad and some will say it's great and we will not really face with anything that is risky or changing at all. So we should focus on what we personally believe, and stick to that.

Volatility is a money printing machine, not a bug. The chop is farmed by the traders but the HODLers prevail as scarcity and adoption make chaos generate higher highs in the long term. The volatility of BTC is still hot but in decline as the asset continues to mature because less volatility gives feel more like digital gold. Use DCA & self-custody to weaponize the swings instead of being afraid of them. And Halvings are used to keep the supply crunch kosher, & the ensuing price lash is literally the price of future reward, and not a flaw, lmao.

[mirakal]

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?

Due to its volatile nature, people become curious about this thing. Their interest has brought Bitcoin to its popularity, and it has been talked about by influential people. I'd rather see Bitcoin remain as it was before and today, rather than pushing it to become less volatile.

Perhaps it was a unique feature that Bitcoin has, and this shouldn't be changed. Or else, that will push people to look for another. Of course, we can't deny the risk it has, but because of this volatile nature, it becomes valuable.

I think we have to accept what it truly is rather than changing it. We are the ones who make adjustments instead.

[Callido]

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 see no demerit in Bitcoin volatility even to traders. Traders needs daily volatility to be able to trade and take profits. Bitcoin investors, investors who are following effective approach of holding for a long period do not bother about price volatility in a short time, they focus on long intervals of price volatility till it sums up to where they think is wise enough to take profits.

We can only see the merit side of volatility, Bitcoin holders prefer when the price in its volatile nature drops drastically creating an avenue for investors to buy in a lower price, the dip price you buy, the bigger profits when the market begins to make bullish moves.

[TheUltraElite]

Price drops and rises happen every now and then but the thing is that people are using it to trade more than spend. While shop owners dont really find much change, we have to see what the regular user finds troublesome.

To them the change in price means money making through trading. So they will not hate this.

So it depends on this perspective, how you are using bitcoin.

[SquirrelJulietGarden]

Price drops and rises happen every now and then but the thing is that people are using it to trade more than spend. While shop owners dont really find much change, we have to see what the regular user finds troublesome.

To them the change in price means money making through trading. So they will not hate this.

So it depends on this perspective, how you are using bitcoin.

People can trade their bitcoins without on chain transactions as what they trade are only credited numbers in their accounts and on order books of centralized exchanges. Trades are only related to on-chain transactions if they do P2P trades which require on-chain transactions and confirmations from Bitcoin miners.

Fortunately, Bitcoin has many use cases and trading is one of its use cases so Bitcoin blockchain is secured by its high hashrate network and many people run Bitcoin full nodes, while demand of owning bitcoin increases over time and make new supply from Bitcoin block subsidy is no longer big enough to satisfy new demand. Therefore, new investors or just new buyers in this market have to wait for weak hands of current Bitcoin owners to buy discount bitcoins when market has dips or crashes.

[Iranus]

I see no demerit in Bitcoin volatility even to traders. Traders needs daily volatility to be able to trade and take profits. Bitcoin investors, investors who are following effective approach of holding for a long period do not bother about price volatility in a short time, they focus on long intervals of price volatility till it sums up to where they think is wise enough to take profits.

We can only see the merit side of volatility, Bitcoin holders prefer when the price in its volatile nature drops drastically creating an avenue for investors to buy in a lower price, the dip price you buy, the bigger profits when the market begins to make bullish moves.

Because you are just looking at the problem from the perspective of an investor with the goal of making big profits. But if you are looking for a payment method, currency, you will find that bitcoin's volatility is a barrier that prevents you from using it. Or if you are a big investor, your priority is safety and stability, not speculation for huge profits. You will also find that volatility is a disadvantage. That is also why, although bitcoin has become popular and many institutions are investing, there are still many large corporations and investors who are hesitant to invest in it.

[nullama]

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?

In my mind I think that the volatility is way lower than what it used to be.

Sure, you will have changes in the price, but there's no way that BTC goes to, say, $100.

Bitcoin is now here forever, and that means that the longer it exists, the higher highs it will achieve.

Yes, the price will go up and down, but fundamentally it will continue to go up.

[MarjorieZimmermanGinger]

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?

This volatility is what can potentially lead to maximum profits or significant losses, especially when it comes to short-term trading. Advantages and disadvantages are inseparable in the market, so those who are able to utilize them effectively will certainly reap commensurate profits. If it weren't as volatile as it is now, Bitcoin might be similar to gold, which tends to move more steadily in terms of price growth, so Bitcoin might not have reached its current price. People hope that a system that is different from what had existed before so that taking an approach to the risk aspect will provide benefits if it is run correctly.