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The price of Bitcoin in early 2014 was based on popularity and hype. I really think that the normalization of a price for Bitcoin is good for the currency, and

The price of Bitcoin in early 2014 was based on popularity and hype. I really think that the normalization of a price for Bitcoin is good for the currency, and that's what I've seen happening.

batbomb 12y ago
it's still a market and the price could still be mostly hype and the "normalization" is only relative to a previous peak.
mrgordon 12y ago
Not to be argumentative, but I see very little indication that any "normalization" is happening in Bitcoin prices unless you simply mean that it is trending downwards more steadily over time. Jan 1, 2014: $770.44 April 1, 2014: $478.72 July 1, 2014: $635.59 October 1, 2014: $381.33 December 31, 2014: $315.33 The numbers above indicate massive volatility. At first glance, it doesn't look as bad from October 1 to December 31, but if you look at the chart then you'll see it went up to $427.24 on November 12 before losing an average of $2.28 per day for a month and a half to get where it is today... I do agree that the earlier prices were simply based on hype though. Typical buy high and sell low behavior.
- gwern 12y ago
  > The numbers above indicate massive volatility. You could look at an actual calculation of volatility instead of eyeballing some random prices: https://btcvol.info/ https://btcvol.info/ Right now we're in a pretty quiet period after the bubble in Jan 2014.
  - mrgordon 12y ago
    Yes the actual volatility calculation is better but my numbers illustrate my point which is that the price is by no means stable in an absolute sense. We are in a "quiet period" relative to what happened during a massive bitcoin bubble but even the site you linked indicates that the volatility is twice that of gold and approximately three times that of major currencies even though we're in a quiet period. Also note that the site is measuring historical volatility instead of implied volatility as is customary for most financial instruments so it can't be compared one-to-one with VIX or similar measures.
- at-fates-hands 12y ago
  Is something which can be attributed to something akin to a market correction? Or is Bitcoin still incredibly this volatile?

The price of Bitcoin in early 2014 was based on popularity and hype. I really think that the normalization of a price for Bitcoin is good for the currency, and that's what I've seen happening.

batbomb 12y ago

it's still a market and the price could still be mostly hype and the "normalization" is only relative to a previous peak.

mrgordon 12y ago

Not to be argumentative, but I see very little indication that any "normalization" is happening in Bitcoin prices unless you simply mean that it is trending downwards more steadily over time. Jan 1, 2014: $770.44 April 1, 2014: $478.72 July 1, 2014: $635.59 October 1, 2014: $381.33 December 31, 2014: $315.33 The numbers above indicate massive volatility. At first glance, it doesn't look as bad from October 1 to December 31, but if you look at the chart then you'll see it went up to $427.24 on November 12 before losing an average of $2.28 per day for a month and a half to get where it is today... I do agree that the earlier prices were simply based on hype though. Typical buy high and sell low behavior.

gwern 12y ago
> The numbers above indicate massive volatility. You could look at an actual calculation of volatility instead of eyeballing some random prices: https://btcvol.info/ https://btcvol.info/ Right now we're in a pretty quiet period after the bubble in Jan 2014.
- mrgordon 12y ago
  Yes the actual volatility calculation is better but my numbers illustrate my point which is that the price is by no means stable in an absolute sense. We are in a "quiet period" relative to what happened during a massive bitcoin bubble but even the site you linked indicates that the volatility is twice that of gold and approximately three times that of major currencies even though we're in a quiet period. Also note that the site is measuring historical volatility instead of implied volatility as is customary for most financial instruments so it can't be compared one-to-one with VIX or similar measures.
at-fates-hands 12y ago
Is something which can be attributed to something akin to a market correction? Or is Bitcoin still incredibly this volatile?