Post
Topic
Board Economics
Re: Can Bitcoin Volatility Be Controlled?
by
jaysabi
on 09/08/2017, 22:01:05 UTC
Bitcoin's volatility will never be controlled, just look at other commodities like gold and see the big swings that happen there. Even fiat currencies often have large swings in their valuation.

"Big swings" is relative. Neither gold, silver, or other mainstream commodities, and especially not fiat, see volatility on the order that crypto has experienced in its short lifetime. Gold on rare occasions can swing 10% in a day, and that's a big move. Crypto routinely swings 20% or more in a day. Fiat is generally more stable than gold, and a few percent in a single day is a dramatic move. (Fiat during hyperinflation is another matter, it's not common and not normal, and is generally a one-way track.)

You forget to mention another commodity

Which perfectly cuts it as a mainstream one and which has volatility quite on par with that of Bitcoin. I obviously refer to crude oil which you kinda forget to mention. I guess it is as mainstream as mainstream itself is concerned, and it is not uncommon to see huge swings in the price of this commodity within a couple of days (up to a few dozen percentages). And it is not just about short-term volatility either. Long-term volatility of crude oil is also quite remarkable. But you certainly know that even better than myself

Yes, a perfectly fine addition to the list of mainstream commodities, but I wouldn't go so far as to say oil has volatility like bitcoin. How often does oil trade on swings as large as bitcoin in as short a time? Oil is comparative to gold and silver, but not bitcoin. In addition to oil, gold and silver have the ability to trade "a few dozen" percent in a few days time, but not nearly as frequently as bitcoin. Bitcoin's volatility I would put a whole magnitude higher, both in terms of the percentage swings, the time frame those swings occur (which are shorter), and especially in the frequency with which those swings occur in those time frames.