I don't buy that argument that Bitcoin is volatile because it has no intrinsic value to be backed upon. Nothing is backed by anything substantive! Fiat is backed by the monopoly power of the state, gold is backed by the social capital given to it. If Bitcoin's lack of physical asset backing was a problem, all currencies would be volatile.
Bitcoins volatility is not new in financial history. Earlier forms of currency like tobacco used in the early American colonies were much more volatile. Bitcoin's instability is just a demonstration of the market. Hype led to speculators buying up the supply, and scares by regulators and panic sellers caused price drops.
There is nothing intrinsic in Bitcoin, besides maybe slow and expensive transactions coming to the fore, that makes it volatile. It is a commodity, and like any commodity, is a slave to market forces - let it be euphoria or panic.
I would disagree. Digital currency and earlier form of currency like tobacco has huge difference from now and then. The argument is about "why Bitcoin is volatile?" so we already assumed that it is volatile. First, volatility
refers to the amount of uncertainty or risk about the size of changes in a security's value. Well since that cryptocurrencies are decentralized, every coin would just be flying around the blockchain. And because no one is responsible for the sudden changes in its price, there is a very high chance of having a dramatic increase or decrease of prices overtime, without any relation to other factors such as season.
You're right, all currencies are volatile, but the type of volatility that other currency have like fiats - they have low volatility meaning their value changes very slowly and the growth is somewhat steady. Unlike cryptocurrency they're high volatility.