This is what any market would look like without being rigged by governments and government backed institutions.
Bitcoin may be the best proof yet of how deeply flawed the libertarian free market ideology really is.
We can't just blanket say that any government interaction with a market is negative. Sure many aspects are. But there are positives as well.
If you look at the housing crisis that occurred that was because the market was becoming unregulated over time and because fraud was allowed to flourish. That was then coupled with human greed and it wasn't entirely the government or the banks faults either, because if regular people weren't going out to buy houses to make money doing nothing, then there wouldn't be such a huge collapse.
At the end of the day it's all the same. People want to get rich doing nothing and any opportunity to do so brings out the greed in individuals. If there weren't some winners in this equation, especially winners that you can relate to, then people wouldn't join in. But when an everyday person makes money this way then everyone starts thinking, well that person isn't special, why can't I do the same?
More often than not the early investors are the ones that reap the profits and hope to exit on time, while those entering the game late are the ones most likely to incur losses.
Protections in the form of contract law, fair and impartial judiciary, notions of property (ownership)...
The price of gold isn't stable because the visible hand of the govt has stabilized it, or if there is any law which protects it.
If you have convinced yourself that this is the reason why it is stable, then you're drinking your own kool aide.
The price of gold, or any currency is stable because its market has been discovered, and huge financial assets have been created which allow people to profit off it's price movements, which results in price stability.
Even with that, Gold market can move up and down quite drastically, for instance when in 2009 and 2010 by 25% and 30% respectively, then dropped by 27% in 2013.
The reason why price of Bitcoin moves so much up and down because it's true market hasn't realized yet, once it does, it's price will stabilize too. No govt can make it happen.
If someone ever manages to mine asteroids for gold or we discover a previously unknown reserve we'll see more price shocks.
I don't know where you got the idea that the supply of gold was stable; it is merely inflexible because it depends on physically digging it out of the dirt.
But I don't know. If you play with the zoom levels on price tracking sites, the $20k peak onward has been a pretty steady downward trend. BTC is down 20% over three days, down nearly 23% over a week. Is that par even for Bitcoin flash-crashes lately? Zoom out further to a month and the price is now down almost 40% at the time of this post.
We zoom out to six months, or a year, or two years, and we see astounding gains then – we are all aware of the blistering rise in price over 2017. But once it dipped after 20k, there were a lot of people who swore it would climb back. And then it dipped further, and further, and the collective memory of Bitcoin's humble recent history was lost in the cacophony of media blitzes and new customers entering the market.
I think the underlying worry for most people isn't the fact that the price goes up and down a lot... I think the worry really is that when growth stops will people still be interested? Can Bitcoin last forever if the price is e.g. <$5000/BTC?