I work in HFT, though we don't deal with Bitcoin. I don't think volatility creates any value, but it can be a sign of market inefficiency if it's caused by a l

I work in HFT, though we don't deal with Bitcoin. I don't think volatility creates any value, but it can be a sign of market inefficiency if it's caused by a lack of liquidity (demand > supply). A typical market making strategy would be to provide liquidity while betting on mean reversion, which will have the effect of dampening volatility. The price won't necessarily trend in any particular direction, it should just dislocate less from some "true" theoretical value.