how about this fix. a wallet that has a built in hedge. it automatically goes short against your balance so you are flat neither long nor short. your dollar equivalent stays the same.
I somehow agree to what Gentlemand said about the fix you have proposed. It may lead to an utter disaster if the process is made automated. It will lead to a bigger liquidity issue that the service provider might face and become insolvent after a certain period of time. It may lead to much higher volatility of the asset pricing if the automation is adopted by the mass, which is already a big issue that we commoners face every single day.
The volatility of bitcoin or any other crypto asset can be reduced by proper adoption and circulation. If a currency is not well circulated within the economy, the fate of that currency is to die. In order to survive in the long run, bitcoin and other crypto assets need to be well circulated within the economy through merchant adoption.
Another big problem I see is the idea of what bitcoin is for many people and what bitcoin really is different. For example bitcoin supposed to be something that is a revolutionary new money that changes the way we use money and manages to decentralized the currency so that no government could ruin it, it is as untouchable as it gets and really gives people a fighting changes to be at least a bit rich compared to fiat where rich get richer and poor gets poorer.
But what do people use bitcoin for? To get rich by selling it... That's really not what bitcoin is for and you should not buy and sell bitcoin to get richer in fiat amount, just because bitcoin increased in price or decreased in price the interest of people changes and that's incredibly wrong. Bitcoin is still bitcoin and has a lot of chance to fight back with fiat.