Volatility of bitcoin

[MeCsc]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

[The Cryptovator]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Volatile: something that totally depends on supply and demand. It's not different for Bitcoin; the overall economy works the same way. Even an iPhone price is higher when a new version launches; later, it reduces in price due to high supply and demand becoming less. Bitcoin has a limited supply, meaning no Bitcoin would be greater than 21 million, so when the demand increases, the price automatically pumps, meaning it becomes volatile.

The same when people start selling instead of buying: then selling pressure increases, and as a result, demand reduces. It means Bitcoin starts dumping, and it's also called volatile. Bitcoin isn't backed by something; it's backed by only a community. So it will always depend on community and investor demands; it won't be stable like a stablecoin. I believe you need to spend more time on the forum and read more to realise how everything works.

[Ivystar5]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Then you should go do more reading about bitcoin, because using the word pegged then I know for sure you do not know anything about bitcoin yet, it should be studied to an extent.

Bitcoin is first of its kind and the first ever cryptocurrency to exist, to what should be pegged? fiat ? the same currency that it was negating from? exactly so bitcoin has to be volatile to bring the expected momentum to it. it has to be traded, offerings of high and low price in purchase and sells make it's volatile.

[Ryu_Ar1]

Volatility depends on the increases and decreases that occur, so the faster the movement, the greater the volatility that can be obtained and why the reason is not stable because this boils down to the supply and sales that occur.

Those of us who are in trading or investing are certainly aware that those who try to adopt (buy or sell bitcoin) are not just 1 or 2 people but there will be so many people doing this that there will be no stable word here because the supply and demand for the market is very large.

So in this case we cannot expect any stability because this will not be possible which makes volatility will continue to exist.

[Emjay24]

But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Bitcoin is volatile because the price doesn't stay the same for a long time, it is always moving in the upward or downward direction in response to market activities( that is the actions of buyers and sellers). Bitcoin value is not pegged to any physical value, the price is clearly a reflection of the liquidity provided by its community comprising of individuals, institutions and even some government like El Salvador. This is the reason why no one can control or regulate it. For coins pegged to some value,e.g USDT which is pegged to the value of the dollar, it is centralized and backed by the dollar on a 1:1 ratio so whenever the U.S dollar suffers inflation, the coins pegged to it are also affected as well.

Bitcoin is different and decentralized in nature and that is why you see that it is volatile since no one controls it and the price is a honest interpretation of the activities of the market and in response to its demand.

[PrivacyG]

If you know what pegged Coins are then your question does not make sense.

A Cryptocurrency 'pegged' to the Dollar means 1 unit equals 1 Dollar.  Bitcoin is not pegged to any thing so here is your answer.  It does not depend on any Asset.  Look up its scarcity, Halvings et cetera and you will understand why people pay more on average for one unit of it in time.

[Lida93]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Volatility of bitcoin isn't a hinderance at all but it's what gives an opportunity to make profit on your asset holding, and also to find a prevailing good position to buy. Without volatility there won't be room for profit making. When market dip and rise it's all both an opportunity made through volatility. It's left for the investor and trader to maximise the moment. All of these ups and downs of the market are caused by market forces of demand and supply. Nothing new just because it's bitcoin.

[Satofan44]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

No pegged coin has a stable value. Stable price is a delusion that is designed to trick those that have no economic or financial education.

Bitcoin isn't backed by something; it's backed by only a community.

You are a complete retard that posts the most low level of misinformation that there exists. Nothing in the world that you are using is backed by anything. Your family is not backed by anything therefore the value of your family members is zero, they are just dirty bags of meat.   Meanwhile, Bitcoin is backed by math and energy. Nothing in the world exists that is even similar to it.

Bitcoin is first of its kind and the first ever cryptocurrency to exist, to what should be pegged? fiat ? the same currency that it was negating from? exactly so bitcoin has to be volatile to bring the expected momentum to it. it has to be traded, offerings of high and low price in purchase and sells make it's volatile.

Pegs don't remove volatility, it is only the most financially illiterate that believe this. If you create a currency that is pegged to the USD, its value is fluctuating all the time.

A Cryptocurrency 'pegged' to the Dollar means 1 unit equals 1 Dollar.  

The dollar's value is fluctuating all the time and going down over time, therefore a peg is meaningless. It has volatility, it is just hidden from the average person who doesn't know any better. OP's topic is a bit retarded.

[batang_bitcoin]

Just like any other stock of companies, they're also volatile. They don't have a stable value or price of their stocks and that's why the opportunity with them is there. But Bitcoin is more volatile to them and that's the reason why we like it even more than those.

I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Simply because it's not a stable coin which are pegged to fiat. And if it still confuses you, look about the law of supply and demand.

[criptoevangelista]

Life is volatile, everything comes in cycles. Human beings are made to live outside their comfort zone and fully in chaos. Nowadays there is a feeling of safety when everything seems calm and peaceful, but nature is not like that. It is chaos that turns boys into men, poor into rich, weak into strong. Therefore, volatility is life, bitcoin pulses life… freedom.

[Darker45]

It may be a hindrance from a certain viewpoint. Surely, it isn't a good characteristic for commerce. On the other hand, it indeed presents a good opportunity to speculators.

I think Bitcoin's volatility mainly comes from the fact that a few players can shake the market with a single move. The market cap is low and the supply isn't well spread across vast market players. It's concentrated. Add to it the fact that smaller players are often reactive to the decisions of whales. And because Bitcoin trading goes on across the world 24 hours 7 days a week without a mechanism like that of the stock market's circuit breaker, a single dump by a whale could create a massive ripple effect.

There are mechanisms that keep stablecoins stable, making sure its value is at 1:1 with the currency it's pegged to or near it. But you have to be reminded that stablecoins are only stable until they aren't. Even top stablecoins had their fair share of depegging. Reinforcements had been done to restore stability.

[Marvell1]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Volatility of bitcoin isn't a hinderance at all but it's what gives an opportunity to make profit on your asset holding, and also to find a prevailing good position to buy. Without volatility there won't be room for profit making. When market dip and rise it's all both an opportunity made through volatility. It's left for the investor and trader to maximise the moment. All of these ups and downs of the market are caused by market forces of demand and supply. Nothing new just because it's bitcoin.

Volatility makes bitcoin an attractive investment and most of us are attracted to this. Because we can take advantage to earn more profit than other investments. But volatility is also becoming a barrier that prevents bitcoin from becoming a currency or payment method that is true to its original purpose. Or it could be the big barrier preventing bitcoin from becoming a safe haven like gold. Not to mention, not all investors like high volatility, and many are hesitant to invest in bitcoin because it is too volatile.

Like anything else, volatility has its pros and cons, and it depends on individual preferences.

[hd49728]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

First, let's talk about Bitcoin. Volatility is important for any market as without volatility, the market is boring and almost dead in trading activities. True traders need volatility for joining the market with their trading. Bitcoin is attractive with many people by its high volatility but more important its parabolic growth with time.

Second, let's talk about "other pegged coins" in your post. They are tokens, not coins, it's first bad thing. They are tokens like Wrapped Bitcoin tokens on different blockchains with peg to Bitcoin price, or stable coins on different chains with peg to fiat currencies. The risk is their pegs can be lost and even to nearly $0 and a famous example is the crash of Terra and its algorithmic stable coin UST, now is USTC.

[TheUltraElite]

Bitcoin is not pegged to any other asset, Stablecoins are.

Its price in terms of fiat money depends on the buying/selling happening in the market.

In absolute terms, 1BTC = 1BTC, but of course merchants will see it in terms of fiat price. Overall volatility remains under 15% which makes the price of average goods have minimal change during ups and downs.

[SilverCryptoBullet]

Bitcoin is not pegged to any other asset, Stablecoins are.

Its price in terms of fiat money depends on the buying/selling happening in the market.

In absolute terms, 1BTC = 1BTC, but of course merchants will see it in terms of fiat price. Overall volatility remains under 15% which makes the price of average goods have minimal change during ups and downs.

Bitcoin is Bitcoin and its value comes from its blockchain-based, cryptographic-based design and how decentralized it has been in development to network operations since 2009. It has high value because of its own intrinsic technical things that are attractive with investors and people who have demand on privacy, anonymity, decentralization as well as full control of their money.

When people realized big problems of fiat currencies, their terrible purchasing power declines with time, and no control of their money in bank accounts, they will look for alternatives and Bitcoin is here for them.

The bullish case for Bitcoin.

[tbct_mt2]

Bitcoin volatility becomes smaller with time but this volatility shrinks is reasonable as we know with higher price, and bigger market cap, price growth and volatility naturally shrink.

Following charts on Bitcoin volatilty show this fact.
https://bitbo.io/volatility/
https://newhedge.io/bitcoin/volatility-index
https://www.theblock.co/data/crypto-markets/prices/annualized-btc-volatility-30d

It's about volatility of Bitcoin price but people who are considering of investment in Bitcoin must see another important thing. Bitcoin mature with time means it has become safer (less risky) for investment portfolio. Investing money in Bitcoin in 2025 is safer than spending money for Bitcoin investment in 2009 or any past years. Bitcoin Spot ETF approvals in the USA in January 2024 and latest adoption are very strong contributions for Bitcoin adoption and mature, to make it much safer.

[d5000]

I know what volatility  means but i still don't  understand  the reason  why price is not stable [...]

Forget the pegged coins, they aren't a good example to compare Bitcoin with.

There are several reasons why Bitcoin is volatile, but the biggest one for me is: there is no good theory about its fundamentals, or its "intrinsic" value (I made a thread about this but it's in Spanish). That makes people all the time speculate about if BTC is currently undervalued or overvalued.

This is very different from stocks for example: from the quarterly filings and so you can often induce if a company is doing well or not, if it will grow or even be close to bankruptcy. While Bitcoin can't go easily bankrupt, there are many scenarios in play in the predictions for the forseeable future: some with a high adoption grade ("the Bitcoin Standard", "Bitcoin as a global currency") and some with a lower adoption than today ("it's only used for speculation, and thus the bubble will pop if there aren't enough greater fools left").

In addition: While we have a very rough idea how many million people use Bitcoin (dozens to hundreds of millions, including ETFs and other derivatives), we don't know how people use it. If we would know that there are 20 million users, but every single one of them would HODL it, it would be much more bullish than 100 million which are only looking to get rich quick and will sell at the first little panic.

Volatility also can lower due to increased liquidity (more coins are exchanged for currencies but also goods and services), and that is happening now. The derivatives like the ETFs also increase the overall liquidity.

My guess is: volatility will continue to lower as long as there's a growth in the ratio of the use cases "HODL", "DCA" and "currency usage" (payments) in contrast to "ride the wave/buy low sell high" speculation.

[m2017]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading

Quite the opposite, as the volatility of the bitcoin creates opportunities in trading for profit (or loss, depending on the trader's skill and luck).

it also gives opportunities  for  enhancing and adoption of new strategies.

Improvements in what? In trading? What new strategies? Buy low and sell high, or the opposite process -  selling short.  Here is the whole simple trading scheme.

But how exactly  is bitcoin  volatile. 

The price of 1 unit of an asset is not a constant value, which is expressed in a change in price towards an increase or decrease in price.

I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

The price is unstable because demand for this asset is also not constant and unchangeable. Depending on the news background, this asset is either bought (increasing in price) or sold (decreasing in price). Traditionally, the price is expressed in dollars, but as we know, dollars are an inflationary currency, meaning that purchasing one unit of bitcoin will require more dollars over time. This also affects the volatility of btc's price.

[pooya87]

There are two main reasons that make bitcoin volatile. (1) not-so-packed order books, (2) much higher number of weak hands.

If you check exchanges, for example you can see that with about $8 mil dump, you can crash the price by 10%. Comparing that with stock market for instance, such an amount dumped would only change the price 1% in most liquid markets.


When panic sell is added to that equation, it will not only bring in the $8 million but will thin out the order book to make it easier to dump.
It also cuts both ways, you can see that same $8 mil would push the price up by about 10% as well.

[X-ray]

Bitcoin being  volatile  is  not  only  an hinderance and uncertainty in trading it also gives opportunities  for  enhancing and adoption of new strategies. But how exactly  is bitcoin  volatile.  I know what volatility  means but i still don't  understand  the reason  why price is not stable and why its not like othe pegged  coins.

Price is not stable because it's pure demand and supply. Try to take a look at literally very asset out there and you'd find out that they are all actually volatile.

The fact is, volatile was never a hindrance. It instead incentivizes adoption of crypto. The deflationary nature of crypto is what make it very interesting asset to buy and its volatile is what attract traders around the world.

Volatility is a feature and not a hindrance.