We are talking about volatility.
@WolfeTone correctly identifies that volatility is closely related to "adoption". I was pointing out that adoptoin takes several forms all with different volatility impacts. If adoption is merely increased speculation that spells even more volatility, indeed one might question whether speculation should even be described as adoption.
This year has to an extent been about store of value adoption by institutions. This should have been a stabilising influence but the overbearing influence of El Musk has had the opposite effect. Also it seems to me that last year's much heralded forthcoming adoption by institutions as sov or reserve asset hasn't materialised.
Ok, I think I see where you're going with that. That's fair enough - I can see a certain logic in it. But lets not get ahead of ourselves. If you zoom out on metrics like no. of active wallets or the price of bitcoin - these can be seen to go upward and to the right. Zoom in and you'll see the volatility. I'm encouraged by that progress but it's still just in the ha'penny place.
The reason I say we shouldn't get ahead of ourselves is that sure, it has edged forward in terms of adoption but it is just edging forward. The likes of Microstrategy and Telsa getting involved were the first movers in terms of corporate/institutional adoption. But they're only just the tip of the iceberg in terms of full involvement. ETFs have been rolled out this year in Canada, Brasil and elsewhere - but a bitcoin ETF still remains elusive in the US. You'll recall the Ross Steven's interview that you listened to - where he suggested that high street banks will be making btc available to customers. We had the first high street bank in Europe ( Saxo in Denmark) enable this last week.
These are just examples - in a given week these days - there's a whole host of significant developments. The reason I mention these things is that with all of this type of activity going on in the background, nobody could possibly expect anything but volatility. I think by now we've also established that there is no earthly way that bitcoin could have been pushed out and automatically find its price. Yet many people think that there's no earthly reason for its volatility but its an inevitable part of its ongoing development.
As regards retail newcomers adding to the volatility, I agree completely. This was touched on before to some extent but someone who has clown car'ed in to bitcoin solely on the basis of Elon and reversed back out on the same basis couldn't possibly have a decent understanding of what they were buying into (as in they have not thought it through whatsoever if they're relying solely on celebrity endorsement). You can say that this type of involvement is pointless. In the short term, I think its cringe-worthy. The same with people buying meme coins, etc. But over the longer term, it does serve a purpose. We've learnt from previous cycles that many people get drawn in - in hype cycles - but in the process they become familiar with bitcoin/crypto, comfortable in storing/transacting it - and they learn about the qualities and purpose that it has.
Isn't this the nature of tech-driven hype cycles? Have we not seen this before with other tech? The difference this time is that it centers on money and it has been entirely retail driven. I'm delighted that this came up with retail but there's no doubt that further institutional involvement (where they're prepared to take an approach that involves a much longer time horizon) will serve to dampen that shorter term volatility.
Outside of that, there's so much more that needs to mature. Later this year,
bitcoin's first software upgrade in four years will take effect. That has implications for certain use cases relative to bitcoin going forward. Lightning Network is only just beginning to make some sort of impact (despite not being a completed project itself - its still being developed). Regulation is still all over the place and has yet to settle. All of these moving parts don't assist with taming volatility in the short term.
All of that to say that its a mixture of a maturation of the tech and its ecosystem, further movement along the adoption curve and time that will lead to decreased volatility.
"Go on have a punt, you have nothing to lose, it could be you. Bitcoin isn't volatile, it is those nasty gringo dollars that are volatile"
Thankfully, the Salvadorans are not pitching anything like that. In no way are they encouraging anyone to speculate on bitcoin. It's very clear what they want out of it - to utilise bitcoin as a tool to circumvent the unbanked issue and allow Salvadorans and their government to reclaim millions in remittance fees. Secondly, to encourage foreigners to come and spend btc in the country and invest in the country. Although merchants are required to accept bitcoin, they are under no obligation to hold it - and can convert it automatically with no slippage.
Sorry your dukeness but I'll have to go with Voltaire on this one.