Why is bitcoin so unstable?

Terrance

New member
Gold is another store of value, but not that unstable. It reached 2000$ recently and was above 1000$ for many years. Those who invested in gold back in 1900 would have made a great choice since it costed only 20$ back then if I'm not wrong. (Although dollar was way more strong than now)

Bitcoin can lose 500$ within one night. Gold can't. Why that?
 

Jesus

Member
Because Bitcoin was created in 2008 whereas gold has been a store of value for thousands of years.
 

Aayan

Member
You have to keep in mind that Gold has been around and used as a form of currency for thousands of years. It's been used by modern day governments as a back to their currency. Gold has physical real world uses to boot. Bitcoin is a cryptocurrency in it's infancy. Stabilization will take time.
 

Jair

Member
If the gold's price was stable, a chart would be like this all the time.



(Yep, I'm a charts expert, glad you noticed it
Cheesy
)

But that isn't the case at all.
There is a big difference between something stable and something less volatile. The fact is, gold is not so stable but has much less volatility compared to Bitcoin.

While you say gold doesn't lose $500 as it does with Bitcoin, that's not entirely true. Firstly $500 for BTC is not the same for gold as they don't have the same value basically. You need to talk with percentages, not monetary value.

Now continuing with your argument, you're wrong, as it happened gold has taken a big plunge, just like it did in 2013. On Comex, the fall in 1 session was close to 10%, the biggest drop in 30 years by the way.

Perhaps it happens less often than BTC but it really happens
 

Calvin

Member
Gold is another store of value, but not that unstable. It reached 2000$ recently and was above 1000$ for many years. Those who invested in gold back in 1900 would have made a great choice since it costed only 20$ back then if I'm not wrong. (Although dollar was way more strong than now)

Bitcoin can lose 500$ within one night. Gold can't. Why that?
Another reason besides the one stated above is that the supply of bitcoin is inelastic, what does this means? In the case of gold we do not really have an idea of how much gold is still buried underground, we have estimations but now thanks to new technology we can extract gold from below the sea, and as such you have virgin territory that could be full of gold.

In the case of bitcoin we know how many coins will ever exist and unless there is a fork that changes this that amount will never change, this means that as soon as there is a change in the demand the supply side is unable to keep up with it and this increases the volatility, and when you add that there is only a few million people using bitcoin in a world of seven billion this means that the volatility is nowhere close to come to an end and you must accept this even if it seems as if you do not like it that much.
 

Howard

Member
Gold is another store of value, but not that unstable. It reached 2000$ recently and was above 1000$ for many years. Those who invested in gold back in 1900 would have made a great choice since it costed only 20$ back then if I'm not wrong. (Although dollar was way more strong than now)

Bitcoin can lose 500$ within one night. Gold can't. Why that?
Another reason besides the one stated above is that the supply of bitcoin is inelastic, what does this means? In the case of gold we do not really have an idea of how much gold is still buried underground, we have estimations but now thanks to new technology we can extract gold from below the sea, and as such you have virgin territory that could be full of gold.

In the case of bitcoin we know how many coins will ever exist and unless there is a fork that changes this that amount will never change, this means that as soon as there is a change in the demand the supply side is unable to keep up with it and this increases the volatility, and when you add that there is only a few million people using bitcoin in a world of seven billion this means that the volatility is nowhere close to come to an end and you must accept this even if it seems as if you do not like it that much.
 

Stone

Member
Basically, Bitcoin's future is very unclear. It may become more widely adopted, it may stagnate and keep being a niche tool for certain groups, it might even lose users with time. It also may get banned by more government, or maybe more governments will regulate it and allow to use. This uncertainty makes it nearly impossible to make a good prediction about Bitcoin's future, so people are just guessing, and guessing causes these speculative bubble cycles. It's a feedback loop, because speculation fuels more speculation, a lot of investors come to Bitcoin to simply ride the waves of bull/bear cycles.

With gold, there's nothing to speculate about. Stocks can be analyzed with calculations. Commodities can be analyzed too. Currencies have central banks to support their price.
 

Yadiel

Member
Gold is not stable. It's just low volatility.
Bitcoin volatility is indeed high. Altcoins' is even higher.

Why? This is a difficult question. It is a combination of multiple "problems":
- Bitcoin is still young
- the market is not properly regulated
- the exchanges don't report correctly the volumes
- rich entities, trading bots and social media manipulation can affect the price heavily
- possibly other problems I didn't think of
 
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