Why Crypto Investors Should Not Be Scared of Bitcoin’s Volatility, Its a Net Positive Feature of BTC
The price of Bitcoin is rising a lot this year. While this may please many investors who are seeing the value of the BTC they hold get bigger and bigger, it also concerns some people about the probability of being affected by the volatility of the market.
As the surge of price above the $10,000 USD mark caused the effect of fear of missing out (FOMO) on the retail market, prices are now even higher and the subject of the moment is volatility.
Greenspan: Bitcoin’s Volatility Is Designed By Default
Mati Greenspan, the senior marketing analyst of eToro, however, affirmed recently to the media that there was no reason to be afraid of the volatility. According to him, this characteristic of the market was created by default.
He affirmed that Satoshi Nakamoto created only 21 million BTC and that 17 million have been mined so far, but only 30% of this number is actually being traded right now. This means that there is a large shortage of BTC and it will be.
This, he believes, helped to create an asset that had more fluid prices because they are heavily affected by demand. This is why he affirmed that we are leaving the “crypto spring” and going back to the summer, so “it’s very hot right now”.
Greenspan compared the current situation with 2011, 2013 and 2017. In all these years, the prices of crypto went up a lot and they eventually went down again. He believes that history will repeat and that 2019 and possibly 2020 will be good years, but that we will see the same cycle again later.
He also talked about how Bitcoin is special because it is an asset that is not correlated with any kind of event and that anybody can hold it. BTC, he said, is very important to people in countries facing financial crisis, too, as it can be used as a store of value when the national currency is being quickly devalued.
Greenspan Is Not Alone, Others Agree That Volatility Is Not An Issue
The truth is that Greenspan is far from alone in thinking that maybe volatility is not really that bad. Bitcoinist recently published an article which highlighted the opinion of Conner Brown, a Stanford Law student who was also a crypto trader.
Brown affirmed that volatility is actually good because it makes sure that BTC goes to the “strongest” holders, acts as free advertising and is the direct function of the scarcity created by BTC.
He also noted that we would not be talking about BTC as the new global reserve asset if it was still priced in less than a single dollar, which is the main proof of why we needed volatility so much.
Obviously, a reserve asset cannot be so volatile forever, but Brown also addresses this question. To him, money is evolutionary, meaning that no coin is born perfect and that they get better with time. He affirmed that then Bitcoin will finally be stable.
Bitcoin (BTC) Live Price
1 BTC/USD =$37,498.2411 change ~ 4.59%
If you want to listen to the full radio interview, head here:
ICYMI: Here's the recording of our Bloomberg radio session yesterday.
Greenspan: For Bitcoin, Volatility is by Design https://t.co/dffPvfZHi9
— Mati Greenspan [not trading advice] (@MatiGreenspan) June 28, 2019