thoughtfan
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October 22, 2013, 11:25:31 AM

The price is extremely volatile

How can it not be volatile when it grows this fast? That's the thing, slow steady exponential growth may happen for other technologies, but with Bitcoin there is actual money on the line for everyone, so it follows human psychology and has mini-manias where it gets overheated then smarter people step in and correct it. With Bitcoin you have to up your tolerance for volatility to match the speed at which the price is moving.

Thank you.  You just eloquently described what I've been thinking for months now.  Trying to compare bitcoin price to technology adoption curves is flawed for the very reason you point out.  If we take an extreme weighted weekly average (below for example WMA 60) it's a fairly smooth line but as you say, with price more closely aligned with confidence than with adoption, fits and starts and crazy rallies followed by sharp corrections are I would venture almost inevitable.