You said "If the economy is expanding at a faster pace then the money supply, the currency could actually appreciate meaning that prices and axchange rates go down..." Yes this is true but the exchange value of money is lower than it could have been if monetary expansion never happened, you see what i'm getting at?
It is easy to show that the monetary expansion has very little to do with price volatility if at all. If Bitcoin supply is fixed as it is, why then do we see that Bitcoin is volatile as hell in the first place?