Hi Daniel, thanks for your comment. I agree that Bitcoin’s price stability is an important topic, so we tried to address it in our most recent article: https://medium.com/@hasufly/investing-in-bitcoin-2ee0c39cc8fa
I hope you find it useful:
“I’m often asked if bitcoin’s price volatility will prevent adoption. Bitcoin is volatile for two reasons. First, bitcoin’s supply is fixed and doesn’t react in changes to demand. Second, as a young currency, it is mainly used for speculation today. Its price is a function of deferred expectations of growth (and expectations of other people’s expectations, and so on), all of which get revised all the time. The best way to think about volatility is as a temporary transaction cost. As bitcoin’s market capitalization grows, less of its value will be from speculation (as there is less future growth to bet on) and more from fundamental usage. That will lower bitcoin’s volatility and make it cheaper to use.
While it can be seen as a chicken-egg problem initially — bitcoin needs adoption to become price-stable, but many forms of adoption require price-stability — using bitcoin has a different value to different people. Bitcoin’s success as money shouldn’t be judged by its ability to perform consumer payments. Instead, bitcoin is first adopted by those who can tolerate the costs because it helps them better than existing alternatives — or because there are no alternatives. With every additional group of people bitcoin serves, it becomes less volatile and cheaper to use, making it more attractive for use cases which are slightly more price-sensitive. A positive feedback loop! The fact that anyone uses bitcoin today, despite its volatility and complexity, is amazing to me and should be seen as a ringing endorsement by the market.”