Does Bitcoin follow the same footstep of Oil in 1890

Does Bitcoin follow the same footstep of Oil in 1890?

Addition of Bitcoin to Portfolio by Paul Tudor Jones

Paul Tudor Jones, an American billionaire hedge fund manager, became among the first institutional investors to take a stake in Bitcoin as a hedge against inflation sparked by colossal money-printing. It is because the condition of Bitcoin reminded Jones of gold in the late 1970s when consumers prices began behaving in an uncontrolled way.

Jones said that if he was forced to forecast, his best is it would be bitcoin. Considering the 1980’s extreme situation, the manager predicts the metal could rally to $2,400 an ounce and possibly $6,700.

Third halving just has taken place

BTC halving is an event when the reward for mining new Bitcoin blocks in half and every 2,10,000 blocks. It slows down on the issuance and circulation of new units of the cryptocurrency. The third halving has already taken place on Monday. With the halving done, the reward of 12.5 to miners has been cut to 6.25 bitcoin. The subsequent halving will limit the reward to only 3.125 bitcoin until all 21 million bitcoin are mined.

Limited supply

Think Bitcoin like any other asset now-

Think about West Texas Intermediate (WTI) crude which hit $140 per barrel in June 2008 when it was thought that oil exploration had peaked. But this wasn’t actually happened then. Collapse was seen in oil price globally in 2014 and WTI is trading just under $30 per barrel. Gold prices have benefited from the fact that we have about to laying out the world’s gold deposits and producers started looking at increasingly less reward in mineral output for the time. They started digging the metal out of the ground spending time, money and effort.

Bitcoin prices have followed the same trajectory so what if BTC follows the way of gold or WTI.

Same Condition of Oil in 1890

The value of something depends on how many people use it. There is no different in bitcoin and cryptocurrency as a whole. Reportedly, just under 50 million unique crypto wallets have been created as of May, 2020. That is why CEO of Layer1, Alex LeigI, said that they were right where oil was in 1890. But many years remaining to understand what situation actually will take place but it is right that the industry is at the forefront of something new and bold.

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