Embracing Bitcoin's Volatility: Why price fluctuations shouldn't scare investors
Bitcoin was at $73,000, now it is around $62,000 a 15% drop in price. This kind of sharp fall can be unsettling for a few, giving detractors a handle to question the stability and long-term viability of Bitcoin as a store of value. Bitcoin's volatility is not a reflection of any inherent instability in Bitcoin itself. Quite the contrary, Bitcoin is arguably the most stable and predictable asset in existence.
Bitcoin is a revolutionary asset that defies traditional financial structures. Unlike companies, Bitcoin has no CEO, management team, earnings to hit, or competitors vying for its market share. It is a physical, bearer asset that can be held without counterparty risk, similar to gold, and it has no dilution risk. Bitcoin is the only asset with a predetermined supply distribution schedule and an immutable fixed total supply, making it truly unique in the financial domain.
So, why is Bitcoin's price so volatile if the asset itself is not changing? The answer lies in the old truism: Beauty lies in the eyes of its beholder. The fact that a large majority of the world's capital has yet to grasp the true value of Bitcoin. Some perceive it as worthless, while others believe it to be worth millions per coin. This vast disparity in perception and understanding is the root cause of Bitcoin's volatility.
