Why you should invest in Bitcoin Tuur Demeester
Is Bitcoin a bubble?
Bitcoin vs. Nasdaq…
2010
2011
2013
“trade in high volumes at prices that are considerably at variance with intrinsic values”
ECB-‐report “virtual currency schemes”, october 2012
Crypto currency is a technology!
Skype user adopHon curve
Skype user adopHon curve
Price of Bitcoin Madness…
… or merely reflecHng a parabolic adopHon curve
SoluHons • Trial and error – Kraken.com, Bitbox.mx, Crypto.st, Stage.btc.uy, LaHncoin.com, …
• Bitcoin friendly jurisdicHons (offshore) • Decentralized exchange methods – Ripple/opencoin, Bitcoin OTC, open transacHons
• Growth of goods & services market
“It cannot be ruled out that … non-‐banks will develop more independent strategies and will no longer need to ally themselves with banks.” ECB report ‘Virtual Currency Schemes’, october 2012
Price discovery
Source: h^p://commons.wikimedia.org/wiki/File:Oil_Prices_1861_2007.svg
Bitcoin money supply
New System vs. Old System
Fiat money supply
Central Banks buy debt…
…hence the bond bubble
When is debt unsustainable?
When is debt unsustainable?
From bail-‐out to bail-‐in
Crossing the rubicon?
FSB, july 19 2011 What? “… proposed policy measures to … resolve [large banks] without systemic disrupHon and without exposing the taxpayer to the risk of loss”
FSB, july 19 2011 Specifics? “…proposed essenHal elements of a bail-‐in regime to enable creditor-‐financed recapitalisaHon of financial insHtuHons. ”
Basically it can mean this:
FSB, july 19 2011 By when? “By december 2012, the … resoluHon plans should be completed.”
Where bail-‐in is being prepared
The bail-‐in "bail-‐in" 70
60
Axis Title
50
40
imf.org bis.org
30
financialstabilityboard.org
20
10
0 2006
2007
2008
2009
2010
2011
2012
2013
In other words, today’s risks are: • Bank holidays • Bond, real estate crash • HyperinflaHon in the currency
The good news
Bitcoin thrives in ArgenHna
Future value of Bitcoin
we are here
Future value of one bitcoin if... 0
Hedge funds allocate 1% to BTC
ArgenHnes change greenbacks for BTC
Gold owners sell 1% for BTC
1000
2000
3000
4000
Future value of one bitcoin if... 0
Shadow economy uses BTC
BTC becomes the new gold
BTC becomes the world’s reserve currency
200.000
400.000
600.000
Cryptocurrency: more than Bitcoin • • • •
Bitcoin mining Stock markets Bond markets AlternaHve cryptocurrencies
Thank you! > TuurDemeester.com >
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Endnotes Slide 10: source is blockchain.info Slide 16: source is wikipedia Slide 19: h^p://www.goldmoney.com/gold-‐research/alasdair-‐macleod/money-‐supply-‐acceleraHng.html Slide 20: source is ZeroHedge Slide 21: source is SocGen: h^p://media.rtl.nl/media/financien/rtlz/2009/socgen2011.pdf Slide 22: Source is h^p://group30.org/images/PDF/orHz091211.pdf Slide 23: source is Haver AnalyHcs Slide 25, 26, 28: “EffecHve resoluHon of systemically important financial insHtuHons — recommendaHons and Hmelines”, by the Financial Stability Board, july 19th 2011. Slide 27: Source is h^ps://bitcointalk.org/index.php?topic=160292 Slide 29: Source is h^p://www.financialstabilityboard.org/publicaHons/r_130419b.pdf , for Canada: google.com/news. Slide 30: own research Slide 33-‐34: localbitcoins.com
Endnotes Slide 39-‐40: Sources are own calculaHons, based on: Bitcoin price: h^p://www.bitcoincharts.com BTC transacHon volume: h^p://blockchain.info/charts/esHmated-‐transacHon-‐volume-‐usd Hedge Funds: h^ps://www.hedgefundresearch.com/pdf/pr_20130419.pdf Remi^ance: h^p://gulfnews.com/business/economy/global-‐remi^ance-‐flow-‐grows-‐10-‐77-‐to-‐514-‐billion-‐ in-‐2012-‐world-‐bank-‐1.1172693 Offshore, data used is from Bank for InternaHonal Se^lements: h^p://www.hkma.gov.hk/media/eng/ publicaHon-‐and-‐research/research/research-‐notes/RN-‐01-‐2012.pdf Black market: h^p://www.voxeu.org/arHcle/shadow-‐economies-‐around-‐world-‐model-‐based-‐esHmates h^p://www.google.com/hostednews/afp/arHcle/ALeqM5h1gBH30nCS4C4QEQC998r9Qnc90Q?docId=CNG. 507ec2ee2770ea21ef8b2af057ac350b.91 World GDP: h^ps://www.google.com/publicdata/explore? ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&tdim=true&dl=en&hl=en&q=world%20gdp TMS of world reserve currency: h^p://www.goldmoney.com/gold-‐research/alasdair-‐macleod/money-‐supply-‐ acceleraHng.html
