Will Bitcoin become MORE or LESS volatile over time?
142 sats \ 3 comments \ @birdeye21 23 Jun 2023 bitcoin
I want to learn how you think.
Here's a look at Bitcoin's annualized volatility (thanks to 21shares Dune analytics:)
https://i.imgur.com/dovfKjO.png
This measures the standard deviation of Bitcoin's 1-year returns. Basically, it's showing how "volatile" Bitcoin is year after year.
The current trend is clear: volatility is decreasing. Bitcoin is becoming more "stable" -- in fiat terms -- over time.
This suggests that Bitcoin's 1-year returns (and losses) are shrinking. And by the looks of it, that seems to be true: Bitcoin has brought consistently less % gains in USD over a 1-year period.
The trend looks to be set in stone, but I like to think we're just flattening out before ascending a hyperbolic growth pattern against the USD (this implies hyperinflation of the dollar)
Credit to Wicked on Twitter:
https://pbs.twimg.com/media/FvdKD_fXsAAuk86?format=jpg&name=medium
If that's the case, we'd see annualized volatility start growing again at some point.
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125 sats \ 1 reply \ @endothermicdev 23 Jun 2023
The key to answering this question is the volatility of the base unit used to measure. If that's USD, sure, macro events and international trade trends will influence the answer.
The thing we should be doing is measuring the purchasing power of bitcoin (a "Big Mac index" if you will.) In that case, I think the answer is clearly a trend to less volatility over time. It's difficult to break the habit of relating everything back to the dollar, but it needs to be done at some point.
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42 sats \ 0 replies \ @birdeye21 OP 23 Jun 2023
that is a good distinction to make
in the long run, tech and more efficient processes will be the primary driver of lower prices, btc is the stablecoin
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7 sats \ 0 replies \ @grayruby 23 Jun 2023
Less then more then less.
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