Read on Twitter
On Christmas a tweet from @PeterSchiff caught my eye.
In it Peter argued that #Bitcoin
should be compared to high growth stocks instead of gold.
That’s understandable given the lacklustre performance of gold this year...
Time for a thread
In it Peter argued that #Bitcoin
should be compared to high growth stocks instead of gold.That’s understandable given the lacklustre performance of gold this year...
Time for a thread
1/ To be fair Peter is right in the fact that it’s hard to compare gold and #BTC .
Bitcoin is on the early part of its adoption curve which means it is loaded with a large asymmetric return potential. Not the case for gold.
So let’s look at some stocks. https://twitter.com/PeterSchiff/status/1341835752909533185
. Bitcoin is on the early part of its adoption curve which means it is loaded with a large asymmetric return potential. Not the case for gold.
So let’s look at some stocks. https://twitter.com/PeterSchiff/status/1341835752909533185
2/ Tesla outperformed Bitcoin this year both in total and risk adjusted returns.
But look back over longer time periods and #Bitcoin emerges as the clear winner.
But look back over longer time periods and #Bitcoin
emerges as the clear winner.
3/ Nvidia did pretty well this year too. It didn’t beat #Bitcoin in total returns but it did so in risk adjusted returns.
But still over longer periods of times #Bitcoin is the clear winner.
in total returns but it did so in risk adjusted returns.But still over longer periods of times #Bitcoin
is the clear winner.
4/ There is a pattern here. It is possible for some stocks to perform better than #Bitcoin over short periods of time.
But over a long time horizon there is always a clear winner.
I haven’t looked at the entire stock market but here is what you get with a small sample.
over short periods of time. But over a long time horizon there is always a clear winner.
I haven’t looked at the entire stock market but here is what you get with a small sample.
5/ Over 1 year, you can find stocks that perform better than #Bitcoin either in terms of total or risk adjusted returns.
either in terms of total or risk adjusted returns.
6/ Over 4 years some stocks performed as well as #Bitcoin for risk adjusted returns. But #BTC is simply growing faster.
for risk adjusted returns. But #BTC is simply growing faster.
8/ What’s driving #Bitcoin ’s over performance?
- The supply shock of each new halving cycle.
- The small market cap of #BTC relative to its nature as a store of value.
- The fact that we are early on the adoption curve.
All things you don't get in the stock market.
’s over performance?- The supply shock of each new halving cycle.
- The small market cap of #BTC
relative to its nature as a store of value.- The fact that we are early on the adoption curve.
All things you don't get in the stock market.
9/ For the same reasons this over performance is likely to continue in the years to come.
More discussions on all that in this issue of the Ecoinometrics newsletter https://ecoinometrics.substack.com/p/ecoinometrics-december-30-2020
More discussions on all that in this issue of the Ecoinometrics newsletter
https://ecoinometrics.substack.com/p/ecoinometrics-december-30-2020
10/ The Ecoinometrics newsletter's goal is to understand the place of #Bitcoin in the future of finance.
If you have learned something today go check it out and subscribe https://ecoinometrics.substack.com/
in the future of finance. If you have learned something today go check it out and subscribe
https://ecoinometrics.substack.com/
