Bitcoin has become boring. (Polite golf clap)
“Anyone around here know what ‘bitcoin’ is? It was worth six cents three years ago and suddenly people are paying over a hundred bucks for it. STOP THE PRESSES!” — Some editor somewhere, April 1, 2013
“What’s up with this bitcoin thingy? It’s now closing in on one grand! STOP THE PRESSES!” — Same guy, November 25, 2013
“Now it’s heading for $200. Bitcoin is crashing. STOP THE PRESSES!” — January 12, 2015
“Bitcoin is up 10x in three months? WHERE CAN I BUY SOME?” — December 11, 2017
“It’s lost half its value since I got in. SELL! SELL! SELL!” — February 5, 2018
“Anyone around here know what ‘deep learning’ is? …” — Today
For what it’s worth, Your Humble Correspondent knows little about deep learning, but that’s a character flaw I’m working to correct.
The point, though, is that bitcoin has been putting the media to sleep since mid-May, and that’s a good thing. As of this writing, bitcoin is right around where it was a month and a half ago. There was a surge, there was a retreat, and we seem to have found the floor somewhere around $6,300. It’s starting to trend up again slowly, just like a normal currency or commodity or security or whatever your religious denomination calls it.
Comparing apples to oranges, mangoes and kumquats
Now compare that to other currencies.
Since June 12, when BTC traded at $6,513, it has lost a grand total of 0.8% in dollar terms.
Same could be said for the Canadian dollar or the Japanese yen.
Now compare that to the euro — which has the distinction of being, after the dollar, the world’s second-most traded currency. It’s down around 1.5% over the same time timeframe. The pound is down even more starkly — roughly 3.5%. The Chinese yuan has dropped around 7% and the Turkish lira lost around one-third of its value before taking a dead-cat bounce.
How about commodities?
As bitcoin lost 0.8% of its dollar-denominated value since June 12, oil gained 1.5%. Gold lost more than 7.5% of its luster. Let’s not even bother with the agricultural commodities. They’re so volatile as a class that there’s no point in comparison.
Securities? The S&P 500 is up 2.5% on a trading basis. The yield on the 10-year Treasury bill is down almost 4%. The VIX — the stock market’s “fear gauge” is up more than 4% in the timeframe, albeit from a fairly low baseline.
I could go on, but you get the picture. The rollercoaster ride is over.
Since June 12 — a cherry-picked date and a short timeline, admittedly — bitcoin has been a more reliable store of value than just about anything else out there that doesn’t have George Washington’s picture on it.
Could it be we should stop all this financial engineering as we try to create a “stablecoin”? Seems that bitcoin, if ignored long enough, becomes one on its own.
