Bitcoin's volatility; it's secret weapon!

[CTO114]

When the discussion of volatility comes up, the natural response would be that it is Bitcoin's major problem, I've come to realize that the reverse is the case, it's actually an important feature of Bitcoin's long term stability.

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself instead of depending on regulatory bodies like the Central Banks. Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

In my view volatility is a component that helps Bitcoin stay decentralized.

Do you still see Bitcoin's volatility asa long term problem?

[goldkingcoiner]

When the discussion of volatility comes up, the natural response would be that it is Bitcoin's major problem, I've come to realize that the reverse is the case, it's actually an important feature of Bitcoin's long term stability.

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself instead of depending on regulatory bodies like the Central Banks. Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

In my view volatility is a component that helps Bitcoin stay decentralized.

Do you still see Bitcoin's volatility asa long term problem?

I do not see any connection between the volatility and Bitcoin's instrinsic property of decentralization.

Although one might argue the volatility is caused not only by media influence and suppy/demand but also the intrinsic property of Bitcoin having a capped supply.

But the larger the distribution of these coins the lower the volatility. In the past, Bitcoin could go down by 50% just because some whale sold but now a single whale cannot accomplish this.

And I doubt we will ever return to those times.

So in my view, volatility will keep going down in the future.

[promise444c5]

You clearly don’t understand what you’re saying, do you even know what volatility is all about, you should follow  the hyperlink and then try relating it to Bitcoin volatility ..

Volatility strongly …….discourages manipulation from even governments as they do with the fiat currencies.

It doesn’t discourage any manipulation, anyone can manipulate the market so far you have the capability and resources to do that.

In my view volatility is a component that helps Bitcoin stay decentralized

Volatility  has nothing to do with decentralization

[Mrbluntzy]

In my view volatility is a component that helps Bitcoin stay decentralized.

This is not true, the price volatility of Bitcoin is not a component or a feature that helps Bitcoin stays decentralized, if you are implying so, does it mean that when the volatility drops, it will make Bitcoin becomes centralized? It won't, volatility is far from what's making Bitcoin to be decentralized, the inability of the government or anyone to restrict you from transferring your Bitcoin from one wallet to another or from your wallet to another person that you bought things from, is what makes Bitcoin decentralized. The inability of anyone to decide how you will spend you Bitcoin is what makes it decentralized.

[hugeblack]

I don't see a direct link between Bitcoin's price volatility and decentralization. Volatility can affect trading, usage, or network congestion, but currently, it doesn't affect decentralization.

Decentralization is heavily influenced by block yield and the decentralized nature of mining pools.

[Justbillywitt]

I am not really sure if you truly understand what volatility is all about, because if you do you won't be sounding this way. Volatility has to do with price movement of an asset (upwards or downwards), so I don't see how the government and decentralisation is coming into the discussion of volatility. Firstly the government has no way of manipulating bitcoin because it is decentralised. Bitcoin was built that way and volatility is totally out of the picture. You need to do more homework on what bitcoin is, and volatility itself so you will understand that what you are saying is making no sense at all.

[FirmWars]

Do you still see Bitcoin's volatility asa long term problem?

I never saw Bitcoin volatility as a long term problem, anyone that did, never understood what Bitcoin volatility is and therefore saw it as a problem, the same people would still expect price to fall so that they can buy more Bitcoin or they will complain that Bitcoin price is too high for them to buy, meanwhile they they appreciate the dip market, they see the opportunity to buy more. The volatility of Bitcoin has advantage and anyone that is calling it a problem doesn't understand, let them go and learn more about Bitcoin volatility.

[reefsea]

I would not consider that volatility in bitcoin is a problem until now because looking at what happened and how we respond to the characteristics of bitcoin in the end volatility is always used as a risk that we must take when we want to be in bitcoin and it will not be a problem.

On the one hand volatility will continue to occur and no one will be able to stop this because volatility has now become one of the things we cannot avoid in bitcoin but there is something that is a little bit odd about your sentence where volatility is a component that helps decentralization. That has nothing to do with it at all because volatility and decentralization are 2 different things so there is no help whatsoever in terms of decentralization when volatility remains because it becomes 2 different things.

[Japinat]

I think there's no real connection between bitcoin's volatility and decentralization. Bitcoin is decentralized in nature, and for that no other third party can control or manipulate bitcoin, however volatility on the other hand refers to the active price fluctuations that constantly happening with bitcoin, but instead of seeing it as a threat, I've learned to embrace it and love the opportunity it brings to the new and old investors in the market. Still, bitcoin's being volatile and decentralized in nature does not connect each other.

[Mia Chloe]

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself instead of depending on regulatory bodies like the Central Banks. Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

Lol actually volatility isn't what prevents government manipulation infact it even aids it. Volatility is what actually gives room for price to progress and that also means it creates an avenue for government and bigger institutions or bodies to manipulate price because of the volume they hold even if the manipulation is gonna be brief.

The point is volatility isn't directly affiliated with decentralization if not I believe Ethereum would be decentralized.

[Joy- maker]

When the discussion of volatility comes up, the natural response would be that it is Bitcoin's major problem, I've come to realize that the reverse is the case, it's actually an important feature of Bitcoin's long term stability.

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself instead of depending on regulatory bodies like the Central Banks. Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

In my view volatility is a component that helps Bitcoin stay decentralized.

Do you still see Bitcoin's volatility asa long term problem?

What are you even saying, who told you that volatility is what help  Bitcoin stay decentralized? you should just hurry back to your dictionary to go check the meaning of decentralize and volatility, because as far as am concerned decentralization and volatility has no relationship. Why not just stop making unnecessary thread that has nothing meaningful on them and focus on doing more reading to gain good knowledge about  Bitcoin and how it works, because threads like yours mostly mislead newbies, making them to believe what is nothing true.

[SuperBitMan]

It is very clear that you don't understand anything about Bitcoin volatile nature.
I will advise you to make some research about Bitcoin so you can know a lot of things by yourself so you won't come here and start saying things you don't know of or you're not sure of, when they say bitcoin is volatile in nature it simply means the rise and fall of it's price, if you check the price of Bitcoin and you are studying it very well you will notice that it goes up and down every minute that is what they call volatility, and again it is not in any way related to decentralization of Bitcoin, I think what you need right now is a very good research by yourself because nothing I will explain here will be clear to you go and do some research by yourself.

[Churchillvv]

Just go and read as someone above suggested and stop saying things out of the air of information that you just grabbed, bitcoin is volatile because of its demand and supply of bitcoin. Not only bitcoin is volatile every investment is. You can say bitcoin volatility is now seen as something good because people project it as an entry point for them in other to make profit.


Decentralization of bitcoin is because not one single person has sole decision making of what will happen and what can’t happen to bitcoin, we all contribute to its decision making. That is pure decentralization.

[Alphakilo]

When the discussion of volatility comes up, the natural response would be that it is Bitcoin's major problem, I've come to realize that the reverse is the case, it's actually an important feature of Bitcoin's long term stability.

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself instead of depending on regulatory bodies like the Central Banks. Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

In my view volatility is a component that helps Bitcoin stay decentralized.

Do you still see Bitcoin's volatility asa long term problem?

I would say it depends on varying points of view, because long term investors or holders see volatility as the path that may assure higher returns when the season is bullish and at a time when they want to diversify or withdraw their investment.
Also, traders see volatility as a time to make profit from price swings that happen and this serves as an opportunity or risk to both the long term holder and the trader.

Some believe that issues of volatilities would be steadier in coming future due to institutional adoption and other frames works that would ensure the continued existence and use of Bitcoin as a true digital currency of value.

[gunhell16]

The question here is, why is Bitcoin called Decentralized? The answer is very simple: because it operates as a peer-to-peer network where no single government or country in the world can control it. This means, from the moment that Bitcoin is decentralized, it will never become centralized, ever.

Now, why is Bitcoin called a Volatile asset? Because this is simply one of its characteristics remember that. This is precisely why there are various speculations about Bitcoin's market price,
and why no one can truly manipulate Bitcoin's price. This is according to my understanding of the matter.

[death69]

This take has been going for years and it never gets more coherent with repetition.

Take me through the mechanism. Seriously, how does price volatility cause decentralization? What's the causal chain? You have not given one because there isn't one. You've observed two things exist at the same time and taken it for granted relationship.

Bitcoin is decentralised because: no single point of failure, consensus is on nodes of the world, mining is spread around the world, protocol changes require overwhelming social consensus. None of this, none, has anything to do with whether price went up or down 5% or 50% last Tuesday.

Volatility strongly discourages manipulation from even governments as they do with the fiat currencies.

Does it? Forex traders move volatile pairs around on a daily basis, that's where the money is. Commodity markets do get cornered, during volatile times, not stable times. Volatility is opportunity for the manipulators with capital. What acts as a disincentive against Bitcoin manipulation is that you can't counterfeit supply. You can't call your friend that sits in the central bank. You can't naked short with infinite leverage and nothing to back it up. The rules are the rules.

[OcTradism]

When the discussion of volatility comes up, the natural response would be that it is Bitcoin's major problem, I've come to realize that the reverse is the case, it's actually an important feature of Bitcoin's long term stability.

Volatility and stability are opposite with each other but you must know that as all other markets, Bitcoin market has volatile times and also stable times while generally Bitcoin market is very volatile.

In my view volatility is a component that helps Bitcoin stay decentralized.

No, it does not have that contribution if you are aware well about decentralization. It comes from Bitcoin network, from Bitcoin network hashrate distributions by Bitcoin miners, mining pools, and Bitcoin full nodes globally. It does not come from Bitcoin price volatility.

Do you still see Bitcoin's volatility asa long term problem?

It is not a problem especially in long term. In long term, Bitcoin prices has very solid bullish upward trend so why it becomes a problem, could you explain?

Even in short term, volatility is gift with people who can take advantage of it, while with others who have bad risk and capital management can be affected, lose money and feel it like big problems with them. It's their problems, not Bitcoin problem.

[Minor Miner]

In my view volatility is a component that helps Bitcoin stay decentralized.

Did you know that bitcoin volatility is decreasing over time? As Bitcoin matures, its capitalization increases and its volatility decreases. Does that mean its decentralization is also decreasing? No, bitcoin is becoming even more decentralized than before. So your point is completely wrong, and volatility has nothing to do with decentralization.

Do you still see Bitcoin's volatility asa long term problem?

Bitcoin's volatility is a feature, not a bug. Most of us like and are attracted to bitcoin because of its high volatility. So volatility has never been and will never be an issue for bitcoin now or in the future.

[d5000]

First, as most others I don't believe "volatility is good" and thus I disagree with the OP.

But even if the OP is quite low-effort there is one assumption that I haven't heard anywhere and even could be interesting to discuss.

Because of Bitcoin's stability intervention is seemingly impossible, rather the market moves towards stabilizing itself

I think this is an interesting observation. The "merit" of volatility would be thus in my opinion that the price finding process is decentralized. And that could have, as a consequence, that the final price (or at least the "final price region") is closer to the "intrinsic value" of Bitcoin than if some entity manipulated it.

Let's see an example: If in December 2017 some big bank had decided "let's stabilize Bitcoin at $20,000" and intervened massively in the market, for example to make Bitcoin "usable" as a SWIFT replacement.

The price would have then not moved much but would have stood in this region, Most investors would have sold. The whole story to "get rich" investing in Bitcoin would have crumbled. Bitcoin would have been used more as a currency, which could have stabilized it further.

But then there's a catch: A $20k Bitcoin means only 400B of "value" of the Bitcoin network ("market cap"). While this was considered insane only a few years before 2017, if we look at it after the experience of the years 2018-2025, and a Bitcoin market cap of over 1.5 trillion USD, 400B looks like very low. It looks it is not enough to "accomodate" the value which today circulates in the Bitcoin network (even if we take away Satoshi's coins and so). And it is MUCH lower than what would be needed for a truly global currency some are hoping Bitcoin can be.

However: I don't think volatility itself is the phenomenon we have to thank for the independent price discovery which made Bitcoin price increase to the $100,000 region. In my opinion the causality is the other way around: decentralization can generate volatility, but the cause for the "unmanipulated" price discovery (i.e. the independent variable) is decentralization, not volatility. Volatility is a side effect. The price discovery would have been also efficient if we had only half of the volatility, e.g. only 40% crashes but also less pronounced bull markets.

[yhiaali3]

Bitcoin's volatility can be a disadvantage at times and an advantage at others, I mean it has a positive side and a negative side.

On the positive side, it encourages investment because this volatility provides both short-term and long-term returns.

On the negative side, it hinders global adoption and the possibility of Bitcoin becoming a global currency, as its volatility makes it difficult to establish as such.