Bitcoin is a volatile asset. We are seeing that now like we have a thousand times before, and this volatility has caused many problems for bitcoin, but per Norway’s finance minister Jan Tore Sanner, this volatility may ultimately disappear in the coming future. Should this ever occur, it would really help cryptocurrencies becomes the mainstream and legitimate assets they have always hoped to be.
Jan Tore Sanner: Volatility Must End if BTC Is to Do Anything Big
Volatility has always been a heavy burden to bitcoin’s fame. In fact, it has seemingly gotten in the way of BTC’s primary goal to become a payment currency. Bitcoin – like many forms of crypto – was initially built to push credit cards and fiat currencies to the side. It was supposed to be utilized for buying goods and services, but this day has not really come yet due to the constant threat of volatility. While some retailers have said “yes” here and there, many still refuse to accept BTC as a form of payment, and to an extent, we cannot really fault these players.
Say, for example, you walk into a store and buy $50 worth of merchandise with BTC. The store does not transfer that BTC into fiat right away and thus something happens that cause the price of bitcoin to fall, and your $50 now turns into $30. You will still walk away with everything you bought, but the store has lost profit. Therefore, many companies are not willing to take chances that they will miss out on money.
Jan Tore Sanner revealed in a recent interview that due to the constant price swings, bitcoin is not ready to be utilized as a payment currency. He explains:
There is no doubt that there is great interest in cryptocurrency both in Norway and internationally, but so far, it has been unsuitable as a means of payment.
A Whole New Level for BTC
However, Sanner was also quick to suggest that volatility could ultimately become a thing of the past once bitcoin becomes a mature asset. It needs to find its footing and once this occurs, the asset could wind up reaching a whole new level of respect and attention. He stated:
It is clear that there may be a development over time, whereby you will be able to get more stabilization mechanisms in the currencies that can lead to greater breakthroughs and upheavals in the slightly longer term.
At the time of writing, bitcoin is arguably experiencing one of its most volatile periods yet. The currency has been engaged in a heavy bull run over the past 12 months that saw it jump from around $5,000 early last year to about $64,000 – a new all-time high – in mid-April of 2021. However, the currency has since lost close to $30,000 off its price – the most its lost since its inception 12 years ago – and is now trading in the mid-$30,000 range.