Saturday, November 23, 2013

A Short Note on the Volatility of Bitcoin

The volatility of bitcoin should not be in the least surprising, since - given its very small capitalization and marketability relative to its intended role as a currency - its size and liquidity is curently roughly equivalent to that of a penny stock as compared with major exchange-listed companies, and its growth prospects and the attendant uncertainty roughly equivalent to that of an early-stage biotech company. In other words, it meets all the characteristics of a highly speculative financial instrument, especially given its additional advantage of being a hedge against rapidly inflating fiat monies. It will gradually lose these characteristics as its capitalization, marketability, and liquidity grow, and its price will subsequently stabilize.

3 comments:

  1. Bitcoin is continuing to produce impressive gains. There are stories of people making millions with Bitcoin trading information. These stories are inspiring so they may force you to put all your capital in Bitcoin. Do not invest all your capital in Bitcoin. Create a diversified portfolio

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  2. Bitcoin.com is your premier source for everything Bitcoin related help. We can help you buy Bitcoins, choose a Bitcoin wallet. You can also read the latest news, or engage with the community on our Bitcoin Forum. Please keep in mind that this is a commercial website that lists wallets, exchanges and other Bitcoin related companies.

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  3. In fact Bitcoin Mentor Club Review, as soon as you deposited cash into your account, the bank will recycle it and loan it to someone else. Meaning the bank doesn't actually hold all its customers money in its reserve. Potentially, if everyone were to try to withdraw all their money at the same time, they would break the bank.

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