I am a French student in a Business School and currently working on a Bitcoin study.

I have 2 questions to you:

  • Are there means, for companies or states, to limit or at least to curb on the volatility of Bitcoin?
  • If not, can a company adopt measures to protect itself from a drastic slump of the Bitcoin price? If so, what are those?
  • Welcome to Bitcoin.SE! A part of this answer addresses to your question, I think.
    – Willtech
    Feb 23, 2018 at 23:25

6 Answers 6


If the respective Nation or company had immensely deep pockets, they could guarantee the Bitcoin price for some time by erecting immense buy / sell walls on all major exchanges. This is suggested for completeness only, as I suspect that this would be an insanely expensive endeavor.

The correct answer is likely that they should hedge their exposition with futures as is common practice in situations where a company has liabilities in a foreign currency.


I have absolutely no authority in the field and I am just expressing my opinion, so please don't quote me on the following.

Bitcoin is a decentralised currency, that is to say no single entity can govern its value and the assets are not stored on a server in someone basement. Authorities can try to affect Bitcoin by making it illegal or passing new laws thus making the price fluctuate greatly. As a simple example, yesterday 2 of the big Chinese exchangers introduced new AML measures and have disabled withdrawals for up to a month, directly impacting the price as Bitcoin holders dumped a lot of their assets. Some more legislation by the Chinese governement have been affecting prices for months, you should follow the news on www.coindesk.com to stay up to date.

So I believe that the answer to your question is that it is not possible to curb the prices.


If not, can a company adopt measures to protect itself from a drastic slump of the Bitcoin price ? If so, what are those?

Actually, several bitcoin brokers offer some future and margin trading so you can at least hedge your risk by trading Bitcoin futures.


You've already received some great responses. For what it's worth I'd like to add;

There isn't much a nation could do to protect from volatility since any national controls don't protect it from all the trading done globally. Also, any controls put in place by a nation might only serve to add more volatility to the market. To some extent, the volatility is due to immaturity in the market. I've read that an introduction of more short pressure would decrease volatility through puts, more short selling. This naturally creates increased resistance so prices don't become hyper-extended.

As above, hedging could be done with options once the market matures. This would protect a company investing in bitcoins. There isn't a natural counter-play so when Bitcoin drops it isn't automatic that something else would increase. Perhaps a basket of 'blue chip' coins like ZCash, Dash, Monero that trade vs. BTC might work. At the moment the best approach is to use the volatility in your favor by buying heavily in deep dips so you end up being less sensitive to the daily price action volatility.


Bitcoins volatility will naturally decrease with time as can be extrapolated from this graph https://www.buybitcoinworldwide.com/volatility-index/. This makes sense as Bitcoin's market cap increases in size. At a small market cap, a large amount of money can create huge swings in price e.g. if $1B was invested into BTC at a $10B market cap the price instantly jumps about 10%. But as the market cap grows e.g. $100B, a $1B investment would only make the price jump around 1%.

On that note I know that some hedgefunds and institutional investors aim to limit volatility of clients money by implementing trading techniques such as 'stop losses' and 'take profits'.


Bitcoin holders can hedge their exposition to bitcoin price fluctuations by using derivatives (e.g. futures, options, ...). This is a common practice, not only for bitcoin but for any other asset held by an entity that prefers to trade some potential upside for a lower risk.

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