Bitcoin’s 1 BILLION Percent Ride – Bubble Or Not?

Bitcoin is possibly the wildest investment 
opportunity ever to have existed. With a one   billion percent return in just eleven years it 
still shows no sign whatsoever of slowing down.   In this enxtensive year-long series we will get 
entirely under the technical skin of Bitcoin   so that you are fully in tune with its 
behaviour and what to expect from now on … On May 22, 2010, now knows as Bitcoin 
Pizza Day, Laszlo Hanyecz agreed to pay   10 000 Bitcoins for two Papa John’s 
pizzas. Since then Bitcoin has increased   in value by no less than 1 billion 
percent at most. Yes, you heard me.   One billion. Ten million times your investment. 
Enough to put any ten bagger chaser to shame. We are wired to understand the market based 
on its normal frameworks and movements.   So when an extreme statistical 
outlier like Bitcoin pops up   from nowhere it quickly becomes too 
abstract to get our heads around.

Let’s begin this series by making a 
brave attempt at putting things into   perspective so that we can get a better 
understanding of what we’re in fact   dealing with here. How incredible 
Bitcoin’s run has been so far. Apple and Amazon are two of the strongest stocks 
ever to have existed. Since their 1980 and 1997   IPOs respectively they have, coincidentially and 
by the time of producing this, gone up by 270 000%   each. That’s 2 700 times your investment. Since 
Apple’s launch the US Nasdaq has gone up by   10 000%. And since that of Amazon it’s gone up 
by 730%. This means that Apple and Amazon have   outperformed the Nasdaq index by 2 600 and 36 
900 percent respectively. Or put differently:   your profits would have been 26 and 370 times 
greater if you were to have invested in either of   the two rather than in a Nasdaq index fund. These 
are returns many people could only dream about. But however insane the price developments in Apple 
and Amazon are, to a great extent unprecedented on   the stock market, they still amount to nothing 
more than 0,027% compared to that of Bitcoin.

By   the same token, if Bitcoin were to have generated 
one million dollars in profits from a certain   investment amount, Apple and Amazon would have 
generated 270 bucks with that same amount.   Enough to buy yourself a vintage 
gameboy. And by the same comparison,   a Nasdaq index fund since 1980 would 
have generated 10 dollars in profits. To break it down, Bitcoin has returned an average 
profit of 558% per year for eleven years straight.   Or 17% a month over the same period of time. 
But what’s most baffling and rather impossible   to comprehend is how literally anybody in the 
world could have been a billionaire today from   a trifling $100 investment just eleven years 
ago.

And the freaky thing about this is how   recent it really was. I, for one, can still give a 
pretty detailed account of my entire year in 2010. There is one reason and one reason only why I 
begin this series by presenting this seemingly   neverending streak of numbers and that is 
because I want to stress how utterly insane   Bitcoin’s price development has 
really been. And what’s even more   mindboggling is how it shows no 
signs whatsoever of slowing down.

What sets Bitcoin apart is not only its one 
billion percent price increase. What this increase   tells us is that Bitcoin is either of two things. 
Either it’s the biggest bubble the world has ever   seen. Or it is a new paradigm that will forever 
change our perception and application of money. Tech and math savvy people who understand Bitcoin 
tend to unanymously appreciate its features,   strengths and potentials. And after six years 
of studying and researching Bitcoin myself,   the only people I’ve personally come 
across who actively dislike Bitcoin – yeah,   who even hate it – are people who don’t 
understand it. I’m talking people who’ve read   critical mainstream articles written by 
surface level journalists who don’t know   the first thing about Bitcoin themselves.

This 
is a prime case of the blind leading the blind. I’m not saying Bitcoin is here to change the 
world. For it might not. Anything that grows   as extensively as Bitcoin has will be subject to 
a long series of problems, public resistance and   adversitites. In a sense, Bitcoin today much 
resembles what IT was in 1999. Everyone talked   about how it would change the world, yet few 
people actually used it. For Bitcoin to really   make it in the long run it will need to gain 
more public appeal and practical application.   Few people could forsee the possibilities of tech 
and the internet in the late 90’s. Life was just   different in those times and we had no points of 
references whatsoever of how the internet could   change our lives for the better. I think the 
same applies to Bitcoin and crypto currencies.   It’s full range of applications are 
beyond our current points of references.   This makes it difficult to fully understand how 
right-in-time this ground-breaking invention   might really be … that is until we’re actually 
there and they cost three million bucks each.   Then people, as in present haters and 
skeptics, will think Bitcoin is obvious and   scold the people of ten or twenty years back 
for being narrow-minded and a bit stupid.

No one really knows what lies ahead.   Regardless of what, there will certainly be 
both practical issues as well as political   obstacles. This uncertainty in turn is a 
premium that is added onto the Bitcoin price. As no one knows where Bitcoin 
will ultimately end up,   all I’m saying is that when two different camps 
oppose each other, with one camp being the loud   and angry one consisting of collective ignorance 
and I-don’t-want-to-listen-to-your-arguments type   of people and the other one being the silent 
one consisting of some of the most creatively   brilliant minds in the world today, I sure 
know which camp I will listen to myself.   The very same camp that turned IT into the 
biggest paradigm shift in modern history.

All bubbles burst eventually. It’s in their very 
nature. Something gets inflated way beyond its   true value upon which the price collapses. 
After that, one of two things can occur.   Either the underlying equity or asset begins anew 
another market cycle, often from a higher plateau,   which too eventually ends in another bubble 
burst. And so on and so on. Stock indices are a   prime example of this as the fifth-waves typically 
get people a bit too worked up on FOMO and greed. The other alternative is when the equity is 
proclaimed dead. We’re talking inflated air. The   South Sea Bubble, tulips and so on. Things without 
or with very little intrincic value whatsoever. Many critics firmly claim Bitcoin to belong 
to this category. It’s got no intrinsic value,   they say. And in a way, they’re right. It’s code. 
But then, by their own argument, all present   IT companies – Google, Facebook, you name it – 
should also be valued at 0.

For what are they?   What intrinsic values do they possess? They 
are also just code. Some will counter and say:   ”Yeah, but they make money from ads.” Sure. Now 
they do. But Facebook was valued at billions   long before any marketing revenues. In fact, 
the expert skeptics upon Facebook’s 2012 IPO   loudly shouted that Facebook would flunk 
because there was no way they’d make   any money. For how could they? They were a 
simple website on which people interacted   and wrote messages to each other. Well … let us 
ask those critics how clever they feel today. My point is this: just because we don’t understand 
now, from our limited 2021 points of references,   how Bitcoin’s areas of application may expand in 
the future, it doesn’t mean it’s worthless. For   most brilliant inventions have had the tencency 
of being ahead of their time.

If you were to   have invented gasoline during the Medievals they’d 
probably use it to set you on fire. But invent it   when the car is around and you can use it to drive 
anywhere you wanna go. I know … that was a stupid   f*cking analogy. For how could they invent the 
car before they’d invented a functioning engine? With this in mind, Bitcoin has gone 
through several bubbles already.   But it hasn’t died. Each time around it has 
come back bigger and stronger and proved to   every headless chicken skeptic 
what it’s actually made of. No. Bitcoin hasn’t died. It merely corrects. 
It rests. And keeps on going higher. This   on its own should raise the question whether 
Bitcoin is a bubble at all, or if it in fact is   something altogether new and revolutionising 
that is here to stay. And regardless of what   people may think about Bitcoin, anyone with 
more than 2 functioning braincells should   stop and reflect whether a billion percent 
move is really just a massive bubble – or   if there’s in fact something truly intrinsic 
behind it, whether they can see it or not.

This series will stretch all the way 
throughout 2021 and is a profound   endeavour to fully and truly portray 
Bitcoin from a technical point of view.   That is its technical behaviour, its technical 
characteristics, its technical history and its   technical opportunities and dangers alike so 
that we can map out what likely lies ahead   in a complete and fully understandable 
fashion. No stone will be left unturned.   It is our aim that this series will be the 
go-to source for a holistic comprehension of   Bitcoin and its technicals. And I personally 
believe this series will be one of the most   profound and valuable productions of 
this entire channel throughout 2021. We will occasionally mix it up with 
some Ethereum, but mainly so in order   to maximize our profits as Ethereum in fact 
has quite a remarkable relationship to Bitcoin   that we will look closely into in 
order to exploit it to our advantage.

So welcome! This is the first out of many 
Bitcoin and Ethereum episodes to follow.   A journey I have personally 
looked forward to a lot. That was all for now. Thank you and goodbye..

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