Generally speaking, liquidity is valuable, and risk is a problem. The volatility might be an indicator of liquidity, or at least attempts to reduce volatility may correspond with reduced liquidity, such as putting your money in a hedge fund that has restrictions on when you're allowed to pull your money back out.
On the other hand volatility can provide arbitrage opportunities for people who know what the "true" price would be. A simple theory suggest that there is a trend, zero or more cyclical patterns, and noise. If you can identify what is noise and what is not the trend, then you can trade against those prices. From the perspective of social utility, pricing error is bad for the economy, and the people who correct it get a share of the recovered efficiency in the market.
In the case of bitcoin it is difficult for me to imagine how to determine a true value. The supply is predictable compared to money, even though the factors that affect the supply of money aren't as unguessable as sometimes claimed. The demand for bitcoin though seems really difficult to understand. As a result its value is much more likely to resemble a random walk, which would mean that there is no mean for the price will revert to.
On the other hand volatility can provide arbitrage opportunities for people who know what the "true" price would be. A simple theory suggest that there is a trend, zero or more cyclical patterns, and noise. If you can identify what is noise and what is not the trend, then you can trade against those prices. From the perspective of social utility, pricing error is bad for the economy, and the people who correct it get a share of the recovered efficiency in the market.
In the case of bitcoin it is difficult for me to imagine how to determine a true value. The supply is predictable compared to money, even though the factors that affect the supply of money aren't as unguessable as sometimes claimed. The demand for bitcoin though seems really difficult to understand. As a result its value is much more likely to resemble a random walk, which would mean that there is no mean for the price will revert to.