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That’s it. That’s the headline.
Understandably, few others are writing about bitcoin as it pertains to presidential elections. But here we are. Let’s just roll with it.
BTC: An assorted history
- Satoshi Nakamoto distributed the bitcoin whitepaper to a cryptography listserv almost exactly 12 years ago (Halloween 2008). 64 days later, a bitcoin was born.
- You could buy one bitcoin for $10 on election night in 2012.
- During the 2016 election, the price was $710.
- Bitcoin last rendezvoused with $15,000 in January 2018, after maxing out north of $19,000 a month before.
Two theories behind the speculation
Safe haven asset. Investors park money in these assets—U.S. bonds, gold, the spot under your mattress—during downturns or geopolitical turbulence. Another source of volatility = a changing of the guard.
- Bitcoin has some qualities that make it seem like a safe haven asset.
- But the theory was battle-tested when markets tanked in March and the cryptocurrency briefly fell to a one-year low of $3,858.
Novel economic institution (h/t ARK). “Money Printer Go Brrr” entered memers’ repertoire earlier this year as governments turned to bazooka-sized fiscal stimulus to cope with the pandemic.
- The meme hits different with bitcoin: The cryptocurrency’s inflation-resistant design doesn’t let central banks (or anyone) put their thumb on the scales.
- Boosters describe bitcoin as an asset that doesn’t lose value, like fiat money, as governments adjust monetary policy, raise the debt ceiling, etc…
Big picture: Theorizing beyond the trendlines, bitcoin faithful have ideas for why the digital gold standard will be so durable.
2020 has more uncertainty in store
But one thing’s for sure: Institutional players, payment processors, and tech companies are warming to bitcoin. And central banks are hatching plans to launch their own digital currencies.
We don’t have a blockchain-based crystal ball and neither do you. But let’s play a game: When will bitcoin pass $20,000? We’ll store your answers on a distributed ledger, and when/if $20k happens, we’ll send a gift to whoever has the most accurate prediction.