Now that Institutions are here, the volatility in Bitcoin will likely decrease but it's not going away

in LeoFinance14 days ago

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Michael Saylor says the volatility in bitcoin is only going to decrease

If you were involved in crypto and bitcoin back in 2017 you probably remember how volatile even the bull markets were.

Most like to talk about how it went from roughly $1k to almost $20k in the course of the year and sort of romanticize it in a way.

Saying things like all you had to do was buy at the beginning of the year and hold until the end of the year and you made 20 times your money.

However, that was hardly the case...

Bitcoin had 6 corrections of roughly 30% from the time the bull market started in late 2016 to its peak in late 2017:

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(Source: https://hive.blog/hive-167922/@jrcornel/on-average-bitcoin-surges-153-after-correcting-by-30-during-the-last-bull-market)

Many remember almost a straight line up, but 30% corrections followed by 100% surges were pretty much the entire cycle.

Michael Saylor says that the volatility this time around is likely going to be less now that institutions are here.

In fact, he even said that 80% corrections are no more in this Podcast Series the other day:

https://episodes.castos.com/5ffc6bf0bf71b5-21733898/34.-Michael-Saylor-on-The-Fiat-Standard.mp3

He said that was evidenced by the fact that the recent correction only went down around 31% or so instead of an 80% collapse.

However, I disagree.

I still expect a brutal bear market once bitcoin eventually peaks during this cycle

I do agree with Michael Saylor that perhaps we see less 30% corrections this time around, I mean having 6 of them in a 16 month stretch is pretty extreme.

But I don't agree that we won't see another 80% correction.

Animal spirits are going to take over like they always do and drive the price up higher than it "should" be.

Once it gets high enough and it runs out of buyers, the price will topple over just like it always does.

The end result will be a brutal bear market that takes prices down something like 80%.

It's the same pattern we've already see play out 3 previous times, in fact it's 3 for 3 thus far.

This time will probably be no different.

After going up to something like $200k at the peak, I expect we will see another massive bear market that takes the price down 80% or so over the course of a year. A 40% drop from $200k would take the price back to $40k or so.

Ironically enough, anyone that sold at $40k and is waiting to get back back in may get a chance at their sell point, except they may have to watch the price go to $200k first.

In conclusion, I agree that overall volatility may continue to decrease as we go forward, but I still think we are going to see another brutal market after we peak that takes prices down roughly 80% from the top.

History doesn't always repeat, but it sure does rhyme an awful lot.

Stay informed my friends.

Image Source:

https://investmentu.com/how-do-you-trade-volatility/

-Doc

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It will be interesting to see how 'corporate bitcoin' will react to the next big correction.

There might be some interesting board meetings ahead...

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Yep, it's an easy case to make when the price goes up every week. When it starts going the other direction, it's not quite as fun.

i believe that the volatility is going away completely.

Because bitcoin will be going no-bid.
The price of bitcoin in dollars will be an unknown.

And in this market, most other things will be priced in #'s of bitcoin.

Like, litecoin will be ⅕ of a bitcoin.

Bitcoin will be equal to 1 bitcoin. Completely super stable.

Ha, yea I mean if there are no dollars any longer and everything is priced in bitcoin, correct, there is no volatility anymore. :)

I'm absolutely with you on that. I also believe that we will take at least one more real bear with us.

All these comments that you read everywhere again, about this time being different and now the institutional investors would provide stability... They were there in 2017, too, and everything was different than in 2013, and in the end? No way, the bear ate them all.

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There is a possibility Bitcoin doesn’t look back from here. A change in monetary structures specifically in the US could be the catalyst.

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I don't think it ever goes below $20k again personally, but I have no doubt it will have more massive corrections on the way up.

The thing is though, if it's mainly institutions buying and pushing the price up and it's likely to be more of that the higher the price goes, then who's it going to be selling to bring prices back down that much? Will there be enough retail buyers to do that?

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Retail is always the last ones to jump in. So institutions may get it to $100k or so, but it will be retail that takes it to $200k etc. And then it will be them that panic sell on the way down, helping to cause the big crash I am talking about. All part of the animal spirits that tend to take over and repeat time and time again.

These are some crazy times and I'm really glad I'm in crypto! Let's hope we can continue to ride the wave and the greed won't overcome us.

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I sure hope it overcomes everyone and sends the prices of everything way higher than they "should be"!

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No ones knows what happens next. We live in a world of belief over knowing; a make believe world. I don't mind what Bitcoin does next, I love the disruption it's causing the banking cartels. I have been in Btc for 5 years, and it's already changed the world even if it went no further than it has today. Tradfi is going, Defi is coming. A great transition phase is upon on us, at last! It will take a few years to dismantle the old system, but that is what is happening, whether THEY like it or not. The Achilles heal of the old system is the incumbency of the old guard. Their inability to react at speed. Their lack of knowledge in the space. Before they have even regulated something, it's already changed to something else. The changes happening now are like ten years of internet growth in a year.
Long Bitcoin - Short the old system.

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Yea, bitcoin was always going to disrupt gold and banks. The dollar is safe for now, but banks and gold are in trouble.