Bitcoin Price Volatility And How Risk Management Is A Vote Of Confidence

The day that bitcoin becomes less volatile is the day that mass adoption will begin. Or is it that mass adoption will minimize volatility on bitcoin?

This is one of the most popular debates in our space as market participants try to speculate when the volatile price action of bitcoin will get smoother. Those who know me are familiar with my stance on the subject: Mass adoption should eventually smooth the volatility curve and price swings on bitcoin, but this adoption could increase volatility significantly in the near term, as the expanding ecosystem continues to adjust to the inflow of new market participants.

As the Bitcoin ecosystem grows and evolves, new players continue to enter with different characteristics from one another, something that can bring disruption or even stress in an ecosystem that has been used to a different reality for such a long time.

The Journey Of Bitcoin Price Volatility

Some of the lowest levels of volatility, in fact, occurred during the early adoption stage (2013 to 2017) of bitcoin, when the market cap was below $20 billion and the network was dominated by early believers in a buyers-only market. Then suddenly, volatility struck with a massive sell off that shook the world in 2018 and took many people “out of the market.”

But what happened prior to the sell off that triggered that event? Many things have been said about this, but few approaches have acknowledged a key event that took place a little earlier, in December 2017: the introduction of the first bitcoin futures product, which started trading on the Chicago Mercantile Exchange.

This was an event that for the first time created a new reality. The ability to short-sell bitcoin on a large scale. In other words, the ability to sell bitcoin that you had never previously owned (even if that bitcoin was never real, but rather just a price tracker).

That consisted of the first expansion of the Bitcoin ecosystem, which came to counter the prior reality of a buyers-only market.

The growing popularity of bitcoin as an asset class on its way to mass adoption triggered the creation of the futures market and the creation of a new type of market participant, the short seller, something that led to a sell off we all remember.

Source: TradingView

Source: TradingView

Moving forward, as bitcoin entered a new market cycle, the pain of 2018’s sell off took most momentum players out of the system and allowed the maximalists to regain the majority composition of the network.

Something that led to the gradual rejuvenation of prices all the way through mid-2020, when bitcoin became, for the first time, the coolest kid in town and mass adoption started to seem like a potential reality.

A Deeper Dive Into The Causes Of Bitcoin Price Volatility

But, before we address the present, let’s take a look at how volatile bitcoin was as it headed toward the CME listing, the price ease and the return to relativity for people outside the network.

Source: Bloomberg Terminal

Source: Bloomberg Terminal

Bitcoin was quite volatile, some might say, as the network was preparing itself for mass adoption. But how does this compare to the price action of mid-2020 to the present, when a record inflow of market participants joined our network and mass adoption began to start getting triggered?

Source: Bloomberg Terminal

Source: Bloomberg Terminal

The record inflow of new market participants led to record volatility in the network, a volatility that does not seem ready to leave the system yet. “Why?” you might ask. “Did we not always believe that mass adoption will bring balance in the system?” “How come bitcoin, at a $100 billion, $300 billion or even $1 trillion market cap, is more volatile than bitcoin at a $20 billion market cap?”

The answer is simple: The market participants now have different utilities and purposes than they did in the early adoption stage, and the network is having a small shock as it is trying to absorb the growth, similar to acne on a teenager’s face as their body grows into that of an adult.

Bitcoin with a market cap in the hundreds of billions of dollars has many new players. Players with different roles and beliefs, with the maximalists accounting now for a significantly smaller part of the pie. The ecosystem has evolved from a buyers-only market that welcomed initially long-term investors, to welcome momentum traders and speculators, proprietary desks and liquidity providers, lenders and a series of other new roles that are in fact very much needed for the long-term purpose of mass adoption, but who have brought extreme volatility in the near term as the network tries to adjust to the new, constantly-evolving reality.

The Importance Of Risk Management

All of that, as one question continues to dominate the market: How can we minimize volatility on a network that has grown from an infant into a baby, but still has a long way to go until it’s fully developed?

The answer is simple: risk management.

Risk management from an individual perspective is the most significant assistance that each of us can offer to bitcoin in order for it to continue to grow and accept new members under lower volatility and smoother price swings.

When it comes to risk management, the number-one rule is understanding your risks. But before we understand them, we actually need to acknowledge them.

“Denial of risk refers to cognitive ways to develop adaption to risky behaviors by rejecting the possibility of suffering any loss.” -Peretti-Watel

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” -Mark Twain

What if the accumulated total of the bitcoin positions in the world were not based on random outcomes, but instead on scenarios known ahead of the position establishment?

What if the liquidation of that leveraged position could have been prevented?

What if the profit of a miner was locked one year out ,or 70% of the value of your portfolio was secured?

Then confidence would dominate the market and the next sell off would not have been as bad as the prior one.

Risk management is a vote of confidence in bitcoin.

Why? Because confidence is derived by known outcomes and known outcomes are an output of risk management.

Risk management is the answer to extreme volatile swings and lesser sell offs. The moment the downside is not detrimental to our portfolios or lives’ savings, is the moment that liquidations will be avoided and panicked selling will seize.

The moment everyone individually manages their risk is the moment that price normalization will be attained and confidence will be achieved in the broader market.

But how do we even approach risk management?

For starters, risk management begins with position placement and trade execution. Or by simply avoiding an overleveraged situation that you have absolutely no control over.

Risk management occurs by making sure that we do not engage in a trade that, if gone wrong, will threaten the financial wellbeing of ourselves and our families.

Risk management occurs when you put a stop loss on your leveraged position instead of doubling down or hoping that prices will return back to where they were.

Risk management occurs when you quickly realize that you are the one who is wrong, not the market, and accordingly adjust your exposure.

In a more moderate approach, risk management can be achieved through the derivatives markets, when you buy a put option in order to establish a maximum loss scenario or a minimum gain. Or simply when you sell some futures contracts for part of your physical position in order to protect your portfolio against nearby volatility and potential adverse market conditions.

Just like anything else in life, risk management should work as a damage-aversion mechanism, not as an aftermath solution. Our goal should always be to avoid our house catching on fire, not putting the fire out once it’s too late.

This is a guest post by Anestis Arampatzis. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


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Cardano (ADA) Breaks $2 For The First Time Since May, Why New All-Time High Is Imminent

Cardano (ADA) has been on a hot streak recently. The price of ADA has seen increasing growth in the market. After crashing down close to $1, the digital asset has now bounced back up to reclaim its place on the market charts. The price dips from the last two months have not seemed to have had much of an effect on the price of the digital asset, as the price has now come back up above $2 as if it had not been struggling before.

Related Reading | Cardano (ADA) Records 13% Price Gains In 24 Hours, Is $2.20 Possible Again?

With this new point broken for the first time in months, the next target for the asset remains the all-time high which it had hit in May before crashing back down. The $2.20 all-time high price point is close now than ever. And it is most likely that the price will hit this target in no time, given that the market maintains the current momentum and price trajectory.

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Good News Sending Price Barreling

A wave of good news has rocked the Cardano community recently. The launch of the Alonzo Purple public testnet will be the final test phase of the project, which will end in the network finally getting smart contracts capability. The dev team announced the launch of the public testnet on Twitter. Explaining that the testers from the previous Alonzo White and Blue testnets will be used to carry out the testings. Along with interested developers who will be granted access to the network.

Related Reading | Cardano (ADA) Receives Approval To Be Listed In Japan

Cardano (ADA) has recently also gotten approval to be listed on exchanges in Japan. Arguably one of the hardest approvals to receive for a crypto project in the market. This put the digital asset on track to be one of the most valuable cryptocurrencies in the market. Opening up the token to a market of over 100 million people who had previously been unable to access the coin.

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As the network approaches complete integration for smart contracts, the community has maintained its faith in the asset. Hold sentiments abound across investors communities. Leading to less sell pressure and more buy pressure. Which the current price surge in the asset can be attributed to.

Cardano (ADA) Price Continues To Outperform

The price of ADA in the past 24 hours has been incredibly interesting to watch. Moving along with the rest of the market in the bull rally, the price looks to be breaking higher than the other cryptocurrencies in the market.

Cardano (ADA) price chart from

Cardano (ADA) price chart from

ADA price barreling up towards all-time high | Source: ADAUSD on

24-hour price analysis shows that the asset has recorded a 14.77% change in price in the last 24 hours as at the writing of this article. Leading to massive gains in the price. Finally pushing the asset price over the $2 resistance point.

Cardano (ADA) is not trading above $2, with indicators pointing that $2 might be the new landing point for the asset on its way towards a new all-time high. A $0.20 increase from here on out will set a new record for the price of the asset. And as each hour passes with the price continuing to show bullish indicators, a new all-time will most likely be broken by the close of the weekend.

Featured image from BeInCrypto, chart from


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Rockstar Gene Simmons’ Bitcoin and Ethereum Has Appreciated Massively – Here Are the Prices He Got In At

Legendary frontman of the band Kiss, Gene Simmons, is discussing his crypto journey and when he dove into the sector.

In a new interview with CNBC, the rockstar says that he jumped into crypto at the beginning of the Covid-19 pandemic after having a conversation with noted Bitcoin bull and Gemini crypto exchange co-founder Tyler Winklevoss.



“I went in big. I put in a few million into Bitcoin when it was around $10,000.”

Simmons calls himself a “hodler” and predicts that Bitcoin’s price will reach as high as $60,000 by the start of next year. Simmons also says that when Bitcoin took its May plunge to under $30,000, he bought more.

“And I’m what’s called a ‘hodler’ … By the beginning of next year, we’ll be at $55,000 to $60,000. So I’m all in. I’m putting more in. When there was a big dip and it went down to under $30,000 or something, I put in more.”

Bitcoin is trading at $45,295 at time of writing, according to CoinGecko.

The Kiss lead singer also says he holds Ethereum (ETH) in his portfolio, which he states to have bought at around $900. He says he has around 14 ETH.

In the past, Simmons has copped to owning the Bitcoin fork Litecoin (LTC), Dogecoin (DOGE) and digital payments asset XRP.

Earlier this year, Simmons said he had invested $300,000 in Ethereum competitor Cardano (ADA).

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Tech Giant Intel is Holding Nearly $800K in Coinbase Stock

In brief

  • Semiconductor manufacturer Intel disclosed to the SEC that it holds nearly $800,000 worth of Coinbase stock.
  • Coinbase went public via direct listing in April. The firm reported record Q2 profits this week.

Intel, the computer processor giant and world’s largest semiconductor manufacturer, disclosed to the U.S. Securities and Exchange Commission (SEC) today that it has purchased 3,014 shares in cryptocurrency exchange Coinbase, which went public in April.

The shares are worth about $787,000 as of this writing, based on the current Coinbase (COIN) stock price of $261.25 per share. Intel’s disclosure notes that the shares were purchased before the end of June.

Barron’s reports that Intel could have acquired the shares before Coinbase’s direct listing began in April, but since the stake in the crypto exchange is so small (by corporate standards), it’s well under the 5% threshold that would require Coinbase to report it when going public. Intel disclosed the investment to the SEC as it holds more than $100 million in total investments as a public company.

Intel’s investment in Coinbase is an apparent bet on the future of the cryptocurrency market, as the exchange’s fortunes tend to fall in line with those of the crypto market. Coinbase went public in April when the market was soaring to all-time heights, but the stock price sank well below the original $250 reference price when Bitcoin, Ethereum, and other top coins tanked in mid-May.

With the crypto market back on an upswing in recent weeks, Coinbase’s stock price is likewise on the rise. It traded at a recent low of just above $220 per share as of July 19, but is worth nearly 19% more as of the close of business today. Even so, Coinbase’s stock price is still well below the opening day high of nearly $430, when investors were in a feeding frenzy.

Cathie Wood’s ARK Invest is the single largest institutional owner of Coinbase shares since the exchange went public. According to CNN, ARK Investment Management owns more than 5.6 million shares in Coinbase at a current value of more than $1.3 billion. Its ARK Innovation ETF owns another chunk of shares, nearly 4.26 million of them, which are worth just over $1 billion as of this writing.

Coinbase’s stock briefly popped above $290 per share this week when the firm reported record earnings for Q2, notching just over $1.6 billion in profit—almost double its Q1 mark. Coinbase’s monthly transacting users (MTU) grew 44% from Q1 to Q2 to 8.8 million, and the firm now has 68 million verified users on the platform.


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No gear, no problem! 3 ways to earn Bitcoin through cloud mining and staking

Bitcoin’s (BTC) rapid recovery above $46,000 has renewed calls for a $100,000 BTC price by the end of 2021, while the effects of China’s crackdown on the mining industry are slowly beginning to fade as the Bitcoin network hash rate shows signs of recovery.

Bitcoin mean hash rate vs. price. Source: Glassnode

One of the side benefits of China’s crackdown is that it has lowered the barriers of entry into the Bitcoin mining space, which has been shown to provide profits in both bull and bear markets.

Bitcoin mining is one of the few ways that investors can acquire BTC without directly purchasing it from the market, and is quickly becoming an industry dominated by big money interests that can afford the electricity costs and upkeep required to run a mining operation.

Here are some options available for the average crypto stacker to acquire more BTC through cloud mining contracts, crypto lending platforms and centralized exchanges (CEX).

Cloud mining contracts

The cloud mining industry has been around since Bitcoin’s early days, and it offers those interested in mining Bitcoin who lack the space, equipment and electricity required an opportunity to outsource their production.

Some of the more well-known companies that offered cloud mining services include Genesis Mining and HashNest, but demand for their services has exceeded their capabilities, resulting in all their Bitcoin mining contracts being sold out.

One of the current mining operators with available contracts is Shamining, a company based in the United Kingdom that has been in operation since 2018, and claims to have data centers worldwide with locations in California, Mexico, Cape Town, South Africa and London, England.

Through this service, users can rent mining equipment and pay for the associated costs of operating the units, while the company handles the physical housing, operation and maintenance. Once operational, generated proceeds can be withdrawn to a Bitcoin wallet specified by the user.

Current rental contracts include two options for GPU miners, which cost around $283 for 23,580 gigahashes per second (GH/s) or $1,066 for 94,340 GH/s, and another option for ASIC miners with a current cost of $2,571 for 235,849 GH/s of mining power.

All contracts indicate that they have profitability that starts at 143%.

Another option that allows users more flexibility regarding the parameters of their mining contract is ECOS, a company that grew out of the Free Economic Zone located in Hrazdan, Armenia, and has been in operation since 2017.

ECOS cloud mining profitability calculator. Source: ECOS

As seen in the graphic above, a 50-month contract for 9 terahashes per second currently costs $1,668 and is projected to result in a profit of 272.82% at a BTC price of $70,000.

It should be noted that all cloud mining services offer warnings about the high risks involved and that no level of profit can be guaranteed. This could be due to a variety of circumstances, including fluctuating electricity prices, Bitcoin price volatility and advances in mining technology that lead to substantial increases in mining difficulty, which renders older equipment obsolete.

Related: Bitcoin mining difficulty jumps a second time as miners settle offshore

Crypto lending services

A more traditional option available for hodlers to acquire more Bitcoin by utilizing their current stack that doesn’t require any further investment, like mining, is through lending services that offer a yield on deposits.

Nexo and Celsius are two of the most well-known lending platforms that allow cryptocurrency users to borrow funds against their crypto holdings or earn rewards for deposits.

At the time of writing, Celsius offers users an annual percentage yield (APY) of 6.2% for Bitcoin deposits, and Nexo offers a standard return of 5% on flexible-term deposits, while fixed-term deposits that go a minimum of one month can earn 6%.

A third option that provides users with a 4% return on BTC deposits is BlockFi, a crypto asset service provider that offers interest accounts and crypto-backed loans and has also recently launched a Bitcoin rewards credit card.

Related: What bear market? Investors throw record cash behind blockchain firms in 2021

Earn BTC from centralized exchanges

Several centralized exchanges also offer Bitcoin holders a return on their BTC deposits, albeit at lower rates than those mentioned above.

Binance, the largest CEX in the crypto ecosystem, offers users an estimated APY of 0.5%, while third-ranked exchange Huobi offers 1.32%.

The best yield offered on a United States-based CEX can be found on Gemini where users can earn 1.65% on their deposits.

KuCoin offers a more free-market approach to BTC lending where lenders can set the parameters of the loan terms, choosing between contract lengths of seven days, 14 days and 28 days while getting to set their own daily interest rates to compete with other lenders on the market.

The lowest rate currently offered on KuCoin is an annual rate of 1.82% on a seven-day contract.

As seen in the data provided, there are multiple ways to increase a Bitcoin stack as opposed to simply buying on the open market, but they are becoming scarcer as time progresses.

With large institutions, energy companies and governments beginning to develop Bitcoin mining infrastructures, smaller market participants are increasingly being squeezed out as cloud mining facilities are unable to keep pace with demand.

Bitcoin lending is increasingly looking like the main way BTC holders will be able to earn a yield paid in BTC in the future, while Bitcoin-backed loans offer a way for hodlers to access the value of their tokens without the need to sell and create a taxable event.

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The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.