5 ms·

If you buy Bitcoin at $1,000 and it stays above $1,000 ... and then at $100,000 per Bitcoin value if it only fluctuates $200 per day, that's not really volatile

• aw3c2 13y ago
  If you buy Bitcoin at $1,000 and it drops to $70 ... and then to $50 per Bitcoin value if it fluctuates $4 per day, that's really volatile.
  • loceng 13y ago
    Right, and so that depends on adoption and acceptance rates, and so making it as attractive of an alternate currency as possible should be the goal of the ecosystem - which includes making it secure.
• pyalot2 13y ago
  Yes, but the volatility nobody is debating is that it was below $1 in 2011 before it shot up above $33 and then came down to $2 at the bottom again. A similar development could be observed earlier 2013 where it started the year around $10, then shot up to $266 and came down again to $80. It should clear to everybody who holds bitcoin, that there is massive volatility, and that you might buy your coins at a time, which can be very dammaging. I would argue however that this isn't an unsurmountable obstacle. A person can substantially lower the volatility he's exposed to at least in the buying phase by dollar cost averaging. An advise btw. that Warren Buffet has publicly given about the current stock market as well.
  • Aqueous 13y ago
    The more people who use BitCoin the less volatile it will be, the more BitCoin tokens will be spread across a large number of individual actors, the less a single actor can dictate price fluctuations.
    • ramchip 13y ago
      What makes you think that? I'm not convinced of either of your suppositions, i.e. that 1) current fluctuations are caused by large bitcoin owners who dictate the price, and 2) that having many small investors would lower volatility (think about crowd behavior...)
      • Aqueous 13y ago
        Yes, I believe if someone sells a large quantity of BitCoins at once it can trigger a big sell-off. Certainly groups of two or three who all sell fairly large quantities of BitCoins around the same time, even just by coincidence, can trigger a panic sell-off. The more BitCoins are distributed are among more people the less a few people selling can snowball into a price collapse. BitCoin already seems to be much less volatile than it was even a few months ago. The up-and-down fluctuations are a much smaller percentage of the price. In the last few days it's been hovering around $1200, without falling below $1100 or rising above $1300. A year ago it was routine for BitCoin to lose half its price and then recover and then lose half again.
    • bushido 13y ago
      This is among the most ridiculous statements I have heard about how the markets work. Its actually the exact opposite, the lesser the people the lesser the fluctuations/volatility. And this is not just about the markets, it applies to most things. ex: 1. Single drug company selling the life changing drug = High near-fixed-global price | As soon as more drug companies can sell increase price competition, higher variance in generic pricing, different rates globally 2. All company valuations remain relatively steady until an IPO 3. If a man/woman suddenly gets a lot of suitors their current relationship if less than optimal may crash and burn , in the absence of alternatives the relationship may have a better chance of survival.
      • akjetma 13y ago
        The transition from an oligopoly/monopoly to a market where price is dictated by competition is different than the transition from few competitors to more competitors.