I stumbled across this paper that was published a month ago, describing mining strategies on the post fixed block reward era. I found it interesting for discussion, and I share it:
https://arxiv.org/pdf/2411.11702.
The competition of people trying to get their transactions included in the next block, being the primary factor that determines block reward, is what causes the volatility. If a selfish miner removes honest miners' blocks from the canonical chain, it can extend the block generation time, and make the competition more intense, which will increase his profitability. The existence of real cost (block subsidy) does not allow this strategy to be profitable at the moment.
That's a good observation about the interplay between miner competition, block reward, and volatility. You're right, the dynamic of miners vying for inclusion in the next block is a significant factor. The intensity of this competition, influenced by things like hash rate distribution and network congestion, can contribute to price fluctuations indirectly , a sudden spike in mining difficulty, for example, might correlate with a temporary price drop as miners adjust.
However, attributing direct volatility solely to this competition is an oversimplification. While selfish mining strategies like the one you described could theoretically manipulate block generation times, the cost of doing so is the risk of being detected .significantly it limits their profitability. The block subsidy is a factor, but other market forces like macroeconomic conditions, regulatory news, adoption rates, and speculative trading are far more influential drivers of Bitcoin's price volatility.
The existence of a block subsidy is important, not just because it directly affects profitability but also because it incentivizes miners to secure the network in the first place. If the only reward was transaction fees, it would be much harder to attract and retain the necessary mining power.