henry copeland: .@binarybits on #bitcoin flux misses key: liquidity needs short positions to dampen highs/lows pllqt.it/jcpU1dBitcoin is volatile for two basic reasons: it's currently difficult to purchase Bitcoins with dollars, and there's a lot of uncertainty about the Bitcoin network's long-term prospects. These are both issues that should get resolved in the coming years, making the cryptocurrency much less volatile. Liquid markets help to prevent price volatility. When the price of gold or pork bellies or shares of Microsoft stock starts to fall, bargain-hunting buyers jump into the market and push the price back up.