Covers why Bitcoin's fixed supply forces all demand shocks into price, why that volatility is the price of admission for a young monetary asset, the difference between good and bad volatility, and what is structurally compressing volatility over time.
With a perfectly inelastic supply, all adjustment happens through price, so volatility is the price of admission for a young monetary asset going through global price discovery. I explain why Bitcoin moves as much as it does, distinguish good, asymmetric, upside volatility from bad volatility, and examine the forces, a broadening holder base, the law of large numbers, and financialisation, that are compressing volatility over time.
This is educational content, not financial advice.