 |
February 23, 2026, 11:07:26 AM |
|
Bitcoin price increases in the period 03/01/2009 - 31/12/2017 (3285 days) 14 000 000x (from 0.001 usd to 14 156 usd)
Bitcoin price increases in the period 01/01/2018 - 23/02/2026 (2975 days) 4.68x (from 14 156 usd to 66 290 usd)
this means 3 000 000-fold difference between the periods of similar length
Litecoin price increases in the period 03/01/2009 (actually 01/10/2011) - 31/12/2017 12 000x (from 0.02 usd to 232 usd)
Litecoin price increases in the period 01/01/2018 - 23/02/2026 0.23x (from 232 usd to 53 usd)
this means 50 000-fold difference
Etherum price increases in the period 03/01/2009 (actually 01/08/2014) - 31/12/2017 2 500x (from 0.30 usd to 757 usd)
Etherum price increases in the period 01/01/2018 - 23/02/2026 2.53x (from 757 usd to 1916 usd)
this means 1000-fold difference
These three are just typical examples: the similar pattern emerges in vast majority of cryptocurrencies. To say "disproportionate" for this is too lean.
The turning point was just somewhere around the end of 2017/the beginning of 2018. If we shift the change of periods even one month into the past or into the future, the abovementioned contrasts are remarkably alleviated.
What we can conclude from that ?
I These two different periods 1) 2009-2017 and 2) 2018-2026 (and counting) are entirely different scenes with different rules.
The first scene - the huge price increases in both absolute and relative terms of the vast majority of cryptocurrencies.
The second scene is characterized by price decreases from the level of the beginning of 2018 - basically in the relative terms (relative to the equilibrium price that is determined by the fame/popularity/acceptance of this cryptocurrency) but often also in the absolute terms - for the vast majority of cryptocurrencies.
The beginning of 2018 was the worst time for investing into cryptocurrencies (they were hugely overvalued). The investment opportunities have become better and better due to price decreases.
II The presence of the second scene in not widely acknowledged because: 1) the cryptocurrencies total market cap has increased from the beginning of 2018 due to the creation of countless number of new cryptocurrencies; 2) the Bitcoin price has moderately increased in absolute terms (which is the reason why Bitcoin is stayed significantly overvalued relative to its equilibrium price); 3) the cryptocurrencies equilibrium prices have significantly increased due to big increases of their fames/popularities/acceptance rates; 4) the noise created by cryptocurrencies great short run volatility (including so called halving cycles).
III Now is the second-scene-best time for investing into cryptocurrencies (their overvaluation is decreased/undervaluation is emerged). But probably the second scene is not ended by now. I have the hypotheses that the most interesting part of the second scene is still ahead. This scene can further develop as following - the Bitcoin absolute price level that has remained steady or even slightly increasing during the second scene until now will start to remarkably decrease towards its equilibrium price level ca 10 000 usd/BTC (the trigger of Bitcoin absolute price decreases can be for example the crash of major stock indexes); this Bitcoin absolute price decreases brings even much bigger altcoins absolute price decreases; if the Bitcoin falls to its equilibrium price level (or slightly below) then altcoins will fall strongly below their equilibrium price levels, creating the best investment opportunities for the end of the cryptos second scene.
May-be my hypotheses will not be proved by the time - the Bitcoin overvaluation can be removed only by the rise of its equilibrium price as well.
But if the Bitcoin overvaluation will be removed by its absolute price decrease then the following leveraged altcoins absolute price decrease - though they are already undervalued - is very probable because financial community has not by now acknowledged the concept of cryptocurrency equilibrium price and they are not able to calculate cryptocurrencies equilibrium prices even in its most robust form: in the order of magnitudes. They calculate the equilibrium prices for stocks but not for cryptos in the second scene, and this allows the actual prices wildly deviate from the equilibrium prices just as in the cryptocurrencies first scene, only in the opposite direction.
|
