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Crypto News Updates

2020: We Were Right

2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

Congratulations to everyone who made it through 2020. 

Nearly everyone was affected in some way by the relentless changes that occured around the world this past year. What was considered a booming economy has taken a massive hit from the results of lockdowns, riots, government restrictions and self-proclaimed leaders who ignore their own mandates. But from these catastrophes, with overbearing politicians and media outlets continuing to distract the masses, a group of individuals came out of this bloody affair stronger and richer. 

We must recognize all of the Bitcoiners who continued to stay true to their convictions and values in 2020 during the March 12 selloff at $3,800, to then ride the BTC price all the way to more than $23,000. Take a moment to reflect on your hard work this past year and all of the great people you have bonded with along the way. A special welcome must also be made for all of the newly-minted Bitcoiners who are now part of the 2020 class. You all could not have picked a more opportune time to join the ranks among the Bitcoin elite.

Despite everything that has occurred throughout the year and the disparity between political leanings, it is important to always keep in mind the things that we control as individuals, rather than as a collective. Nobody is going to help you as much as you are willing to help yourself. 

Many Bitcoiners have taken this advice to heart in order to avoid being caught up in many of the situations that unraveled throughout 2020. Bitcoin is a thriving community, but each individual is rewarded based on how much they contribute and accumulate. There are no winners or losers selected by politicians. Proof of work is not propped up by fictitious “points,” printers going brrr or free helicopter money. There are no handouts here, but hopefully readers of this article can take away a few key insights on making the most of the Bitcoin climate today: How to take advantage of the accelerated gig economy, institutional adoption of Bitcoin, excessive money printing and the decline of available bitcoin on exchanges.

Leverage The Gig Economy And Stack More Sats

The pandemic has brought on a wave of change for many, especially for those with jobs that require them to be physically present. 

Those who are able to adapt quickly and pivot into more remote work are going to see the most benefit from lockdowns. If one is also able to gain multiple gigs or streams of income with help from their online social circles, they are setting themselves up for a very prosperous future. These types of jobs may include: content creation, videos, lectures, writing, podcasting, arts, design, programming, ecommerce, consulting and anything related to the digital space.

If you or someone you know is looking for an online job, the best time to start building up these skills was any time prior to the pandemic — but the next best time is to start now. 

A rapid transition to remote work has occurred and it is important to acknowledge this trend more than ever. If you are fortunate enough to currently work from home, you have most likely experienced an ample amount of time saved throughout the day. Commuting, office politics, ego, the appearance of looking busy and constant distractions from coworkers are now non-existent during a work day. There are many in the ranks of management who have prolonged this necessary change but fortunately, they are seeing that tasks can still be accomplished from anywhere and do not require an employee to be in one location to do so.

As great as this corporate evolution appears to be, it is important to keep in mind that remote work regulations may be coming down the pipeline in the near future. These regulations will stifle and slow down progress for corporate employees. Companies may consider major pay cuts in the near future based on your place of residence. It may even go as far as having employees pay multiple tax rates for your current residence and for the location of your employer. Crazier things have happened, so be prepared for these tax implications to be brought to the attention of those in power. 

The best way to offset this potential tax is to consider multiple streams of income by working for yourself, or at the very least have multiple side gigs that can be accomplished online. Relying on one source of income is going to become more and more risky, if it was not too risky already.

Institutional Adoption And Involvement

On a more exciting note, possibly the best news of the year for bitcoin and its holders was the institutions that have not only had to adapt to employees working remotely, but also seriously reconsider what their reserve assets should be in a hostile monetary environment for the U.S. dollar. 

Microstrategy, Square and many other companies have built up sizable positions in bitcoin to stave off the threat of losing purchasing power. PayPal has also entered the space in a big way by providing access to purchasing bitcoin and other crypto assets for its millions of users and merchants. PayPal users are currently unable to withdraw their purchased bitcoin onto a personal wallet, but it is overall a great step in the right direction for worldwide adoption.

NgU

We joke and meme about bitcoin’s price going up all the time and how this trend will fix the world. But it’s all true because it becomes less and less of a joke as time goes on. Over 20 percent of all U.S. dollars in circulation were printed this year and the Federal Reserve continues to increase that number.

Simultaneously, the number of bitcoin on exchanges continues to decrease. 

Source: Glassnode

There is also increasing demand from institutions and high-net-worth individuals to continue purchasing bitcoin, even at all-time highs. 

All three of these factors alone are enough to ensure that the greatest savings technology of all time will continue to operate as intended.

What To Look Forward To In 2021

For active members in the Bitcoin space, most are aware of the $100,000 to $300,000 predictions for the bitcoin price that have been discussed throughout a range of memes and podcasts. 

Many signs and bitcoin’s current projections signal that we are on course to reach these prices. Expect more naysayers and traditional financial “experts” to continue spouting FUD against all positive developments. Stay the course and keep accumulating consistently with a DCA service or other means that allow you to self custody. Nothing in life is guaranteed, but what is guaranteed in these hostile macro environments at least is that governments will not stop printing money. 

The best (and only) solution to preserve one’s wealth is through Bitcoin. In 2021, it is highly likely that more unpredictable events will continue to happen. In a world of constant uncertainty and bad actors trying to control large populations, Bitcoin is the one shining beacon of salvation because it is the most predictable and transparent system known to man. 

In no other industry or space has there been as much optimism and creativity to propel humanity to a bright future. The Bitcoin evangelists, plebs, cyber hornets, honey badgers, unique beasts and everyone in between continue to educate world citizens on how to take back their sovereignty.

This is a guest post by Deniz Saat. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post 2020: We Were Right appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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Crypto News Updates

Bitcoin Is A Mature Asset

Bitcoiners have to endure a lot of criticism from those who are still skeptical of the digital asset. A lot of the time, this skepticism comes from misunderstandings about the true nature of what the network is capable of. Headlines like “Bitcoin Was Hacked,” “Bitcoin Is Used By Criminals,” and “Bitcoin Is Bad For The Environment” are examples of the common misunderstandings that Bitcoiners have to disprove to their colleagues, friends and family whenever the topic comes up. 

One such argument that may be difficult to counter is the fact that bitcoin is a very young asset. It was introduced just 11 years ago and many naysayers dismiss Bitcoin altogether because they see it as a new experiment or fad that will die out, like MySpace or Beanie Babies. But what if there is a very sound counterpoint that may convince the cynics that bitcoin is indeed on its way to becoming a true, tested and mature asset?

Historic Market Hours And Other Factors To Consider

We can think about the maturity of an asset through the lens of the hours it has been publicly traded, as opposed to the number of years it has existed on the market. 

Let’s take the beloved S&P 500 for example. First, we need to consider the date it began trading and how many days out of the year it usually trades for. The S&P 500 was founded on March 4, 1957, while trading hours occurred only on Mondays through Fridays from 10:00 a.m. to 3:30 p.m. and are closed on holidays. 

This would equate to 5.5 hours of trading on a normal business day with 252 total trading days in a year. However, we cannot calculate the number of hours until we address how market hours have been changed over the course of history. 

It wasn’t until October 1974 that the exchanges began operating from 10:00 a.m. to 4:00 p.m., which would allow markets to trade for six hours on regular business days. And then again, in 1984, the market hours were switched to the current times of 9:30 a.m. to 4:00 p.m., which would allot 6.5 hours per trading day. 

Types Of Days That Are Excluded

Leap Year days, half days (this depends upon which day of the week certain holidays occur), closings due to catastrophic events (such as September 11, 2001 and the spread of COVID-19) are not factored into our calculations. 

Something to keep in mind when discussing the benefits of bitcoin as compared to equity markets is the year-round, 24/7 availability to trade the digital asset. If you have access to a bitcoin exchange, you are able to buy and sell your bitcoin whenever it is convenient. Trade halts in the middle of the day do not keep bitcoin from being traded. Even if all of the bitcoin exchanges in your area were to close up shop, you would still have access to trade through peer-to-peer exchanges. There is always someone around the world willing to trade bitcoin. In contrast, trading stocks requires a broker and specific hours of operation. 

The last thing to mention is the Cowles Index, created by Alfred Cowles, who was an economist and founder of the Cowles Commission. In 1938, Cowles felt it necessary to track the performance of the average investor with a stock market index. We will not include the trading hours of the Cowles Index in our calculations, but felt it necessary to mention because it is the predecessor of the S&P 500. 

With all of this in mind, we may now calculate a rough estimate of the number of hours for which the S&P 500 has allowed trading since its official inception in 1957. We will then compare the trading time of the index with bitcoin’s trading time.

Calculating the S&P 500’s Total Market Hours Vs. Bitcoin’s

The span between March 4, 1957 to September 30, 1974 equals 4,449 workdays. Multiply 4,449 workdays by 5.5 hours per day and we get 24,469.5 hours. 

The span from October 1, 1974 to December 30, 1983 would equal 2,321 workdays. Multiply 2,321 workdays by 6 hours and we get 13,926 hours.

The span from January 2, 1984 to October 30, 2020 would equal 9,207 workdays. Multiply 9,207 workdays by 6.5 hours and we get 59,845.5 hours.

If we add all of those hours up together, then we get a total of 98,241 trading hours for the S&P 500 throughout its history (which does not factor in half days or closings due to catastrophic events, as noted above).

Now, let’s apply that same math to Bitcoin. 

Bitcoin’s network was launched in January 2009 but did not start experiencing price discovery until it was traded on BitcoinMarket.com (no longer in operation) on March 17, 2010. Bitcoin trades 24/7 every day of the year, so the calculations are a lot easier to determine. The number of days from March 17, 2010 to October 30, 2020 (we will use the same end date as we do for the S&P 500) gives us 3,881 days. We can multiply the total days by 24 (hours in a day) to get 93,144 total hours of trading time for bitcoin. 

This would project Bitcoin to overtake the S&P 500’s trading hours by July 18, 2021. Bitcoin will have more trading hours than one of the most highly-respected indexes of all time in a little over a year after it’s third subsidy halving. We can also apply this type of math to other markets as well and project when Bitcoin will overtake the amount of hours for which each of these markets have traded.

Stealth Date Calculations

“Stealth dates” are the nearest projected dates that Bitcoin overtakes the amount of trading hours for any particular market. For this exercise, trading hours are calculated from the date of each market’s inception up to the date of October 30, 2020. 

Please note that we are also not calculating the number of hours during which futures are traded and are not including after-hours trading.

All listed dates are projections and are not entirely accurate because we are not taking into account leap years, half days that occur throughout the year, catastrophic events or other unique circumstances.

Bitcoin (BTC)

  • Year founded: 2009 (price discovery began in 2010)
  • Total trading hours: 93,144 hours

DOW Jones Industrial Average (DJIA)

  • Year founded: May 26, 1896
  • Total trading hours: 182,127.5
  • Stealth date: April 25, 2033*
  • Total hours until stealth date: 109,440
  • Stealth date completion percentage: 46%

S&P 500 (^GSPC)

  • Year founded: March 4, 1957
  • Total trading hours: 98,241
  • Stealth date: July 18, 2021**
  • Total hours until stealth date: 6,264
  • Stealth date completion percentage: 93%

NYSE Composite (^NYA)

  • Year founded: December 31, 1965
  • Total trading hours: 80,272.5
  • Stealth date: April 16, 2019
  • Total hours until stealth date: -12,871.5
  • Stealth date completion percentage: 116%

NASDAQ Composite (^IXIC)

  • Year founded: February 5, 1971
  • Total trading hours: 78,677.5
  • Stealth date: March 8, 2019
  • Total hours until stealth date: -14,466.5
  • Stealth date completion percentage:  118%

Wilshire 5000 Total Market Index (^W5000)

  • Year founded: 1974
  • Total trading hours: 74,662.5
  • Stealth date: September 21, 2018
  • Total hours until stealth date: -18,481.5
  • Stealth date completion percentage: 124%

There is, of course, the argument that volume has a huge effect on the maturity of an asset and this is true. Bitcoin’s volume will need to increase and be verified through better methods before it is able to truly become a mature asset. In many ways bitcoin is still discovering how and where it fits within our world. But knowing that bitcoin, at the time of this writing, has traded around 93 percent of the same hours as the S&P 500 has traded within its lifetime, allows everyone inside and outside of the Bitcoin space to reconsider how far along we really are. At the very least, skeptics will be hard-pressed to find a rebuttal against these numbers.

Special thanks to @BitcoinTina and my sister Peri for helping me complete this piece.

Calculating Projected Stealth Dates:

*Calculating the projected stealth date for the DOW Jones Industrial Average:

8,760 = Number of hours in the year

93,144 = Total number of hours bitcoin has traded since inception

1,638 = Trading hours for equity markets per year (9:30 a.m. to 4:00 p.m. on weekdays excluding holidays)

182,127.5 = Total number of hours the DOW has traded since inception

We will now solve for x:

8,760x + 93,144 = 1,638x + 182,127.5

-93,144. -93,144

8760x = 1,638x + 88,983.5

-1,638x -1,638x

7,122x = 88,983.5

/7,122    /7,122

x = 12.494

Convert to days

12.494 * 365 = 4,560.31

Next step would be to add 4,560 days to October 30, 2020 which would equal April 25, 2033.

**Calculating the projected stealth date for the S&P 500:

8,760 = Number of hours in the year

93,144 = Total number of hours bitcoin has traded since inception

1,638 = Trading hours for equity markets per year (9:30 a.m. to 4:00 p.m. on weekdays excluding holidays)

98,241 = Total number of hours the S&P 500 has traded since inception

We will now solve for x:

8,760x + 93,144 = 1,638x + 98,241

       -93,144            -93,144

8,760x = 1,638x + 5,097

-1,638x  -1,638x

7,122x = 5,097

/7,122    /7,122

x = 0.715

Convert to days

0.715 * 365 = 260.975

Next step would be to add 261 days to October 30, 2020 which would equal July 18, 2021.

The post Bitcoin Is A Mature Asset appeared first on Bitcoin Magazine.

Source: Bitcoin magazine