Valuing BTC Using a Macro Framework
OK, now let’s look at the price after the initial early adopters bought it and it subsequently
crashed in 2011. It then rose from a price of $3 to around $227, which is a rise of 7,500%. It
then fell 70% before recovering again.
A pretty wild ride.
Early stage volatility
But what I know from past experience is that initial stage investments like this are always
volatile. But if they take hold then they can go up further than you could ever, ever, ever, ever
imagine.
Microsoft back in 1986 to 1987 rose 400% then corrected 30% – twice – before rising again.
Microsoft eventually topped out after a 44,000% rally from that point. Forty-four THOUSAND.
Looks awfully similar
Now, when I saw the chart of BTC I knew it reminded me of something. And this bit is
important. It looks just like the price of gold back in the 1950s to 1980s…
The rise in BTC has been much larger in percentage so far, because it basically started its
creation worth nothing, whilst gold had a multiple thousand-year history of value (but it too at
some point was worth nothing).
What happened to gold next is what I am interested in. Gold suddenly had real value in an
inflationary world as Nixon left the gold standard. Gold exploded higher, further than anyone
could forecast. People were desperate for gold…
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