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Bitcoin symbol image: Worth 20 cents ten years ago
Photo: JIM URQUHART / REUTERS
First slowly and then suddenly very quickly: This principle is already known in the Bitcoin community.
This is not the first time that the course of digital money is developing.
If the Bitcoin price meandered relatively steadily between 8,000 and 12,000 dollars for over a year, things are now suddenly very fast again.
And upwards.
On Monday, the price on the Bitstamp trading platform rose to $ 19,808, surpassing the record high of the end of 2017. At that time, the high was there at $ 19,666 before the Bitcoin crashed and meanwhile lost around 80 percent of its value.
Now things went steeply uphill again: Within a few weeks, the Bitcoin value has increased by around 50 percent.
In view of such figures, one could quickly tick off the current development as a renewed speculative bubble.
The course of the share price over the past twelve years shows that price bubbles are a recurring part of digital money.
It is likely that the current share price development will end in another bubble and should not come as a surprise.
However, things are a little different this time than at the last high: In contrast to 2017, when the Bitcoin price of almost $ 20,000 was the absolute top of the excitation curve that ultimately burst the bubble, the general public is apparently hardly interested in at the moment the Bitcoin rate.
The currency has matured technically
This time there are no breathless headlines, no German rappers rapping their underage fan base bragging about their crypto investments, no omnipresent FOMO, i.e. the fear of missing the chance of a lifetime if you don't buy - or sell - Bitcoins now .
While in 2017 Google search queries for "Buy Bitcoin" shot up parallel to the price, the question of how and where to actually buy Bitcoin does not seem to be any more urgent on the Internet than it has been on average over the past two years.
This begs the question of why Bitcoin is so popular in the first place.
Where does the demand come from, which ultimately determines the price of Bitcoin as one of two factors?
Even if there are several possible answers, they all have one thing in common: a lot has changed in the past three years.
Bitcoin has technically matured during this time.
The reference software Bitcoin Core alone has received 15 smaller and larger updates since the last price boom.
Another, on which the community has worked long and hard and which could significantly increase the functionality and efficiency of Bitcoin, is about to be implemented.
In addition, the Lightning network has created a Bitcoin-based payment infrastructure that enables fast, secure and efficient payments with Bitcoin on the internet.
However, without overloading the blockchain, the actual Bitcoin cash book, which is limited in its capacity and performance.
Instead of three to seven transactions per second, Bitcoins can now also be sent via payment channels that are cryptographically linked to the blockchain.
In purely mathematical terms, each payment channel can process up to 500 transactions per second.
A significant increase.
After all, the Lightning network already consists of more than 35,000 of these channels.
So the supply becomes scarce
The user base has also grown.
Researchers at Cambridge University estimated the number of owners of crypto values at more than 100 million worldwide in a study published in September this year.
Even before PayPal announced in October that it would initially start trading and later also pay with cryptocurrencies.
The payment provider is just one of many companies that are increasingly interested in digital money.
Its technical maturation in connection with a phase of low interest rates, the end of which is not even in sight even after years, make the crypto currency increasingly interesting as an alternative investment.
For some time now, companies have therefore increasingly started to invest part of their assets in digital money.
It is already known that more than 800,000 bitcoins, i.e. a good four percent of all computationally available bitcoins, are now owned by companies.
If they do not resell them to their customers, they are taken off the market.
Which further tightens the supply - the second factor that determines the Bitcoin value.
An effect that is intensified by the so-called »halvings«.
These are the times specified by the Bitcoin protocol at which the generation and output of new Bitcoins are halved.
A process that guarantees that gradually fewer and fewer new Bitcoins will come onto the market and that there will never be more than 21 million of them.
Historically, these halvings, which occur roughly every four years, were always followed by an increase in course with a slight delay.
Slowly at first and then suddenly very quickly.
The fact that the Bitcoin price is now reaching a new all-time high at the end of the year is therefore not surprising to most of the Bitcoin community.
Since the last halving in May of this year, people have been waiting and speculating where the journey will end this time: at $ 100,000 per Bitcoin?
At 200,000?
Or more?
Some numbers sound crazy, but they are not entirely out of thin air when you consider that a Bitcoin cost 20 cents around this time ten years ago.
Analysts therefore also refer to Bitcoin as an asymmetrical bet.
On the one hand, you can lose 100 percent of your stake.
On the other hand, however, make more than 100 percent profit.
However, this is by no means guaranteed.
Because even if the signs may be good at the moment, nobody can reliably predict the development of the Bitcoin rate.
Accordingly, the bet may be exciting, but it also remains risky.
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