Bitcoin Offers Stability Amidst Dollar Volatility

When we talk about Bitcoin, many people immediately think of volatility. But here's a perspective shift: Bitcoin isn't volatile; it's the US dollar that is.

Bitcoin often gets labeled as “volatile,” but that label is a misunderstanding of how Bitcoin functions. In reality, Bitcoin is not volatile—it can’t be. Why? Because Bitcoin operates with a known issuance rate and a fixed supply of 21 million coins. These characteristics are hard-coded into its protocol, making it one of the most predictable assets ever created.

Bitcoin's Predictable Nature

Bitcoin operates on a clear, transparent system with a known issuance rate and a fixed total supply of 21 million coins. This means every Bitcoin holder knows exactly how much Bitcoin will ever exist. There's no surprise inflation or unexpected minting of new coins. This predictability is the hallmark of stability in economics.

The Illusion of Volatility

The apparent volatility of Bitcoin comes from its price being measured in US dollars. When we see Bitcoin's price fluctuate, what we're actually witnessing is the changing value of the US dollar relative to Bitcoin. The dollar, unlike Bitcoin, does not have a fixed supply. Its issuance is managed by central banks, where decisions on how much money to print or withdraw from circulation can be influenced by myriad economic factors, often unpredictably.

The Dollar's True Volatility

The US dollar's value can swing due to numerous reasons - from political events, economic policies, to global market sentiments. This makes the dollar inherently volatile. When people talk about Bitcoin's price in dollars, they're essentially tracking how the world's trust in the dollar fluctuates. If confidence in the dollar wanes, people might decide to "exit" dollars for Bitcoin, causing the dollar's value to drop against Bitcoin and vice versa.

Bitcoin as the Benchmark

In this light, Bitcoin serves not as the volatile asset but as the constant - a digital gold standard where its value doesn't change; instead, it's the currency it's measured against that does. The real question then becomes, why do we measure Bitcoin in dollars rather than considering Bitcoin as the stable yardstick against which other currencies should be measured?

Conclusion

The narrative that Bitcoin is volatile needs a reevaluation. It's not Bitcoin that's volatile; it's the currencies we compare it against. By understanding Bitcoin's fixed supply and issuance, we begin to see that perhaps it's the traditional currencies, like the US dollar, that are truly unpredictable. In the world of Bitcoin, it's not about entering or exiting a volatile market; it's about recognizing where the true volatility lies - in the currencies of old.