Cryptocurrency Volatility Lessons
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Much has been written about the volatility of bitcoin as a reserve currency or stored value. It's hard to find a fair comparison because this is such a unique context. From reading a variety of posts, I investigated the volatility of gold after the US dollar dropped the gold standard. Below is a chart showing the last years of gold prices. Many historical price charts use a logarithmic scale and show inflation adjusted numbers.
These are NOT using a logarithmic scale. These are NOT inflation adjusted numbers. If we assume gold is the same bitcoin volatility comparison commodity before and afterthis chart begs the question, what happened? Well, inRichard Nixon took the US dollar off the gold standard. The relationship between gold and the US dollar changed. Since the US dollar was, and is, a bitcoin volatility comparison reserve currency, by reference the relationship between gold and all currencies changed too.
I absolutely agree that bitcoin is volitile. I believe it's a good stored value and medium of exchange, but it needs work before it can become a unit of account. By looking at just the volatility of this chart backwards, I expect it's just a matter of time before some digital currency becomes the new gold standard. If we bitcoin volatility comparison that going off a gold standard, introduces volatility, bitcoin volatility comparison we assume the opposite?
Can we assume that going onto a gold standard will reduce volatility? I'm not proposing the US go back to using the gold standard If the gold standard of bitcoin is the underlying electricity required to mine it, then decreased volatility is just a function of time and liquidity. I'm excited to bitcoin volatility comparison the variety of opinions. So, what do you bitcoin volatility comparison will happen in this specific scenario, and why? Can you use math to support your opinion?
Gold Prices - Year Historical Chart Comparing Volatility of Bitcoin to Gold Much has been written about the volatility of bitcoin as a reserve currency or stored value. Assumptions If we make these assumptions, what would happen to the bitcoin price in US dollars? Lightning network Inflation in the US dollar continues to erode the purchasing power of the US dollar International business demands faster transaction speeds across countries I'm excited to hear the variety of opinions. References Why did the US leave the gold standard.
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