Bitcoin in comparison to traditional assets: Like he's gonna cut off after 10 years?

Bitcoin is one of the most fascinating commercial values, which were observed last year. From the dizzying heights to the latest fall to a new low for the year of the crypto currency market stalls in the attempt to characterize its volatile ebb and flood, is downright thrilling.

become Surrounded by the growing number of enthusiasts, activists, and investors, calling for greater acceptance - and, above all, the introduction of new financial instruments, which are intended to make the emerging new asset class presenter - the Bitcoin rates to the leading indicator for the market. It is still difficult to characterize crypto-currencies and to determine how they fit into the modern financial paradigm - whether it is a currency, a digital asset or a commodity. But the rating of the Course in the context of its established analogue counterpart, it shows that Bitcoin and other crypto-currencies of important milestones have been reached.

By the analysis of the characteristics of the rise of Bitcoin in connection with raw materials such as Gold and Oil or technology stocks, which have managed to survive the last technology bubble, it is easier, the Position of Bitcoin in the context of past Performance, and highlight how the prospects of the Coins can affect. The barrel is really so unprecedented? Or the Course is more of a self-fulfilling prophecy, which experienced inevitably periods of accumulation, consolidation and distribution, as observed in other, more established asset classes? We have carried out a comparison, to see what clues are hidden in this historical price context and how the Bitcoin makes the Ranking in terms of performance.

Digital Gold

The fact that he has existed for 10 years - even though he incurred the wrath of the regulatory authorities, a number of exchange hack attacks and experienced more and more in a cul-de-SAC developed - is Bitcoin a modern marvel. Many have compared him with Gold and Bitcoin even the nickname of the "digital Gold" - and, in some ways, this assessment is correct.

Gold and Bitcoin are, in terms of scarcity and effort one must apply for the "Mining" (the minting of new assets), in fact, very similar. You are not under the control of a single organization and are extremely difficult to forge. Its drawbacks are similar. These are on the one hand, the limited fungibility, despite its generally accepted value, and the fact that both are used in times of market uncertainty, as a safe asset.

When comparing the Charts of Bitcoin and Gold (top and bottom), there are also similarities. Both assets started, for example, without the exchange-traded funds (ETFs). For Bitcoin it is not. The following graphic shows the development of Gold prior to the introduction of physically backed ETFs about 15 years ago.

in Spite of their different time lines there are remarkable Similarities when compared with the Pre-ETF Chart of Bitcoin. This also makes perfect sense, since the progress of modern technology to accelerate the same chart curves for Bitcoin, while the gold market has matured over the decades. In addition, this also indicates that a physically backed ETF would contract for Bitcoin, do the same thing as before for Gold. After the first Gold-backed ETF of ETF Securities in March 2003 on the market, and later to the GLD ETF was introduced, prices increased from a low of 332 dollars (291 euros) to nearly 1,600 U.S. dollars (1.403 euros). These developments also improved the price discovery and liquidity for the gold market, and promoted at the same time, a wider participation of the retail trade.

An ETF launch could trigger the next Bitcoin bull run, just like it happened in Gold. Currently, investment of own capital in BTC is reminiscent of the investment in Gold in the 1980s and 1990s. Specialists who knew how to get it and it was stored better.

could values Because both are considered as safe investments, and Gold in the terms of the transaction will be overtaken in volume gradually from its digital competitors, the correlation between these two assets in the future. Investors in turbulent times, increasingly, the Bitcoin and crypto rather than for Gold. The transaction volume of Bitcoin has exceeded recently, for the first Time, the of Gold. According to the London Bullion Market (LBMA), it is expected that Gold in 2018 reached 446 billion US dollars (391,3 billion Euro) on completed transactions over the counter. Bitcoin has been experiencing this year, however, already 850 billion US dollars (745,8 billion euros) in transaction volume.

crypto-with-Tech-draw share is equal to?

One other potential Muse for crypto-currency and Bitcoin might be the technology sector, and it could represent a better control group, since its utilities are well matched. Bitcoin is currently equivalent to slightly more than 51 percent of the total crypto-currency market capitalization. To consider only a single Coin is, however, that you cannot see the forest for the trees. A significant contribution others have made new Coins and solutions that have now arisen, including ICOs.

Blockchain is for companies what the Internet was in 1995 - a better Medium to reach consumers. The expectation that the Internet would accelerate the way we do business, has led companies that had to do with the Internet, recorded a rate explosion, which is today known as the Dot-Com bubble. Some of the world's companies benefited from the high stock prices shooting, by establishing only a website. It was similar with the new crypto Start-ups, managed by the end of 2017, suddenly, eight-digit Token economies. In both cases, the enthusiasm about the disruptive potential of the underlying technology has made to individual use cases is unclear, but the resulting Crash brought the power company back on the market.

The lull after the bubble in Tech stocks meant that the Internet was a Bust, but merely that there was more optimism and speculation as innovations. It was also created more space so that superior technology can come up companies. Amazon is an example of one of the greatest success storyn, and achievements of all times. However, the shares plunged during the dot-com boom to 95 percent up to $ 6.00 (5.26 euros) per share.

A Portfolio with only US $ 1,000 (877 Euro) on Amazon shares, which was bought in September 2001, would be approximately 225,000 US dollars (197.407 Euro) value.

The same story played out in other former companies with low stock prices, such as Oracle, Adobe, SanDisk, and others. The Bursting of the crypto bubble would help to separate the winners from the losers. The next Time the prices reach previous levels, it may be for the company to use the Blockchain to provide a tangible, real value. This means that the entire market will grow? In the case of stock that was the case. Just look at the Chart of NASDAQ-100:

crypto could of course generate the same interest and the same value as before, but it's not about that. Would Bitcoin's reach - the unofficial Barometer of the market - again at its high, just like NASDAQ? This is not to see clearly before. Bitcoin has an individual value, but also acts as a access for Fiat in the larger crypto-space. If the Blockchain creates, however, in the future, compliant Fiat-additions and capital-raising methods, could the Bitcoin and crypto-currency courses to the value that is supplied by the Blockchain. In this case, his Chart could slowly sink to Zero, since the Power of the Blockchain from the boundaries of the existing capital procurement model breaks out.

Bitcoin is a commodity?

The formal Definition of a raw material is standardized in the trade in basic goods used in relation to their physical properties, in their very nature, interchangeable. While this is, in principle, the basic idea of the commodity market, there are in reality, however, grey areas. Take, for example, crude oil. Although there are two large contracts (West Texas Intermediate and Brent), there are several varieties, which differ depending on the location, extraction, density, and other important distinguishing features. Nevertheless, despite this inherent subtleties as interchangeable.

In terms of exchangeability corresponds to the Bitcoin is definitely a commodity. In addition, obtained a distinction in the case of Bitcoin, the Mining, if it's about how energy products. This is done by the Release of new Coins and the addition of new blocks to the Blockchain. Here is the raw comparison ends, however, in particular when viewed in the context of the demand and how this affects the Mining. While both Oil and Bitcoin can be considered as finite resources, which are faced with shortages - whether natural or artificial, Oil can be exhausted, while Bitcoin is not limited in this way.

If anything, the only aspect that connects these different raw materials, the demand conditions and how these affect the price. Oil producers can increase production in case of rising or falling prices, or reduce, the profitability decreases at low prices and margins in times of high prices to be larger.

As Bitcoin attracts more miners at higher prices than at lower. The main difference is the difficulty, with each of these tasks is met, as well as a greater Use. Oil drives the planet in one Form or another, by generating energy. The use cases for Bitcoin, however, are limited in terms of applicability (although they grow with the Ecosystem). During the drives the world economy, uses of the other power, to serve as the way of transfers of Value for and between Blockchain-ideas. The relationship, however, underlines the sensitivity of prices to demand and how they changed the supply-side fundamentals.

If you look only the Performance, throwing Bitcoins long-term Performance, however, a long shadow on Oil prices of the last five years, as the crypto currency trading has gained momentum, and in the range of the Mainstream came. Even though Oil can be used better in practice, by generating electricity and power, our modern economic power. The correlation coefficient has a varying, but generally positive relationship between the two instruments, but is anything but consistent. The price of Bitcoin in US dollars rose during the period to 250,33 percent, surpassing with ease the decline in Oil prices to 51,10 percent in the same period.

These estimates raise more questions than they provide answers, but the Interpretation of these questions in a historical context sheds a little light on the possible ending scenarios, since both enthusiasts as well as investors the next steps for cryptographic rate.