Bitcoin

Fundamental Analysis

Updated 2nd June 2018

The very first chart below shows Google searches for the term Bitcoin. The hump shape is very typical for bubbles that were observed in the past. A very similar function can be found in epidemics research. It depicts mathematically how epidemics spread until they disappear. The parallels regarding epidemics and past bubbles were observed by Professor Robert J. Shiller from Yale.

The peak occurred in Dec. 2017. We see the chart as substantial evidence to our interpretation that the bubble has burst. We were among the very few who identified this within hours as it happened. The performance section shows our tweets at that time.

All in all, it fits right into our overall scenario that risky assets are in a topping process. This topping process showed cross-asset divergence quite reliably in the past. Bitcoin probably reached a lifetime terminal top of multiple degrees during this process. Energy costs for its mining as well as transaction difficulty make Bitcoin non-sustainable from a fundamental point of view. This does not imply that the blockchain technology is dead. On the contrary, it is a great technology. We expect it to find its way into our lives and improve certain areas that will benefit the broad public.

It is time for us to discontinue our Bitcoin and cryptocurrency coverage at this point. This is most likely the last post here specially dedicated to Bitcoin.

Technical Analysis