The new all-time high: the first?
Happier squircle by cesar bojorquez via flickr.com. License: Creative Commons
Hooray! New all-time high in dollars! So it is official. The media reports, but it does not even feel like a bubble. Is it possible that the bubbles of the third Reward era are still ahead of us?
In Euro, bitcoin has cracked the old all-time high of the winter 2013 - 850 Euro - for some time.Yesterday, the price on Bitstamp with 1,220 dollars also reached a new dollar all-time high.
So it's official: no one in the world has made a loss, buying bitcoins and simply keeping them. Not in Germany, not in China, not in the USA. Even if he has bought on the top of a bubble!
Of course it goes through the media. 30-40 German newspapers, magazines and magazines. The Press Agency DPA has issued a communication which has even reached the Wormser newspaper. As a reason for the great price, it calls speculation that the Bitcoin ETF is approved, a general concern about political uncertainties in the US and Europe as well as capital controls in China.
At this point, it is time for a compliment: The media now reports neutrally about Bitcoin as a financial product and also know what is at stake. Instead of just being reminded of Silk Road and Mt. Gox, just as one to two years ago, the press release is now almost straightforward:
Bitcoin is a digital currency that has been created on the Internet. It has been in circulation since 2009. Bitcoins are generated in complex computing processes on the users' computers. They are based on the so-called "blockchain" technique: all bitcoin transactions are stored on all participating computers, grouped into blocks that are concatenated with all previous transactions. A central register, as in a central bank, is no longer required.
Thank you. But what you should add, necessarily, to these possible or impossible reasons why the bitcoin has now reached a new all-time high is the halving. Strictly speaking, it is the only thing that really matters.
If you do not know: Bitcoin's flow through miners is regulated by the protocol. The miners, all together, produce only a certain amount of bitcoins about every ten minutes. This amount is halved every 4 years. At first it was 50, then 25, and since summer 2016 it is 12.5. There are less and less fresh bitcoins on the market in the course of time.
Economically, this should be like the oil price shock in the 1970s. At that time the OPEC countries had cut the output by 5 percent. The oil price jumped rapidly, and tripled to quadruple over the following years. And with a capping of 5, and not, as with Bitcoin, of 50 percent!
Of course oil can not be compared with money, and, of course, past courses do not tell us how future courses will behave. It could always be quite different. But when we look at what the bitcoin price has done after the first halving, and imagine that he does it again, it becomes dizzying.
Source: Bitcoincharts.com
So, until the first halving in the fall of 2012, the all-time high was at $ 30, and the price went sideways at about $ 10. Immediately before and after the halving nothing happened. The output dropped, but the price remained the same. Then, in March 2013, he began to rise. At some point, he passed the old mark of $ 30. Shortly after, he jumped to 260, and after an intermediate stop on a floor of about 100 dollars, he shot in November at over 1,250. In short, the price had increased by two tens. From 10 to 100 to 1000.
Each halfing era had so far had its bubbles, crashes and soils, its bulls and bear markets. So far, only a small bubble came, relatively early, followed by a short bear market, and on it a large, powerful bubble, whose bursting a bear market of many years.
It is interesting to see the course exponentially.
Source: Bitcoincharts.com
This is the chart of BitStamp, from the end of 2012 to the beginning of 2017. It is, more or less, the history of the second Reward era, which ends in mid-2016, and in which 25 Bitcoin were distributed per block. On the right side you see the price, so scaled that an exponential growth becomes visible. In 2013 there were two exponential jumps, in April and around November. The price increases non-linear, but increases. In both jumps, the volume of trade - the green and red columns - is clearly increasing.
History does not repeat itself. It is possible that Bitcoin has exhausted its limit at around € 1,000. That, if at all, a linear growth continues, and that the exponential jumps, as demonstrated by the bubbles of the previous rewards, is over. May be, perhaps also desirable.
But it does not have to be so. We do not know, because there has never been such a money before. Therefore, we do not know how the world will react to it.