The price of Bitcoin fluctuates greatly due to certain factors that make it unique and certain differences that exist between it and fiat currencies.
The amount of Bitcoin issued is predetermined by the protocol and does not fluctuate. Therefore, as explained in detail in " The End of Central Banks - The Future of Bitcoin and Currency " (by Mitsuru Iwamura), when demand for Bitcoin increases sharply, the price rises immediately because the amount of Bitcoin issued (supply) hardly changes. Conversely, when Bitcoin's valuation falls and demand decreases, the price falls sharply.
In the case of legal tender currencies such as gold, Japanese yen, and US dollars, the amount of money issued (supply) can be increased if demand rises, so the value of money does not rise sharply. (Another problem is that too much money has been issued, both in the case of the Japanese yen and the US dollar, so the value of money has fallen and inflation has occurred, but we will leave that issue aside for now.)
In addition, the market size of Bitcoin is relatively small, and the actions of some large investors can have a significant impact on the price. When these factors combine, the price fluctuation range becomes large. Nevertheless, since the birth of Bitcoin in 2009, when 1 BTC was only a few US dollars at first, 1 BTC is now worth 30,000 US dollars (July 2023), and the market capitalization of Bitcoin (the total value of Bitcoin) has reached 580 billion US dollars (approximately 82 trillion yen at the current exchange rate, data source: Infinate Market Cap ), so compared to 10 years ago, the volatility has been gradually decreasing. ( Data source: Bitcoin Volatility Index )
However, since the market capitalization of gold is 13 trillion US dollars (approximately 1,800 trillion yen at the current exchange rate, data source: Infinate Market Cap ), and Bitcoin's value is only about 1/22 of gold's, I don't think the range of fluctuations will decrease much yet.
But there is another important point: Bitcoin is not yet widely accepted as a measure of value.
For example, even if the Japanese yen weakens against the US dollar, ordinary people do not immediately raise or lower the prices of goods and services denominated in Japanese yen. The yen weakens by 1% today, so the prices of imported goods do not increase by 1% today and decrease by 0.5% tomorrow, etc. This is not what happens. Perhaps gasoline is the closest to a situation where the yen reacts directly to the exchange rate of the US dollar. Even then, there is a time lag.
This is because the Japanese yen is widely recognized as a measure of value, that is, an index of prices. However, when the price of Bitcoin falls, people who sell goods and services in Bitcoin immediately raise the price in Bitcoin. This is because Bitcoin is not yet widely accepted as a measure of value.
If more people think that "1 BTC is worth 1 BTC," more people may buy more Bitcoin when the price of Bitcoin drops. We believe that at some point, the awareness that Bitcoin's value does not depend on other currencies and has its own value will spread.