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2minutebitcoin
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2023-04-27 12:57:39

2minutebitcoin on Nostr: When a freely chosen unit monetizes through market processes, one can expect ...

When a freely chosen unit monetizes through market processes, one can expect volatility. Bitcoin’s volatility is not surprising because it:
1. is not widely understood
2. is in early stages of development
3. derives value from government instability, which itself increases market uncertainty and market volatility
4. has uncertain expectations of future utility, especially in the face of legal hurdles.
5. is decentralized. Centralized sectors have low volatility because it takes just a handful of actors to suppress it. Communism had no price volatility (until it collapsed).

Bitcoin’s exchange rate can be in a temporary bubble phase at a given point in time.
-- an excerpt from the 2-minute version of Bitcoin Hypermonetization: Bubble Talk (2013), originally posted in https://www.2minutebitcoin.org/blog/bitcoin-hypermonetization-bubble-talk-2013
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