- >Oil Hits Zero Before Bitcoin
Oil Hits Zero Before Bitcoin
Oil just hit zero dollars for the first time in history. Meanwhile, Bitcoin has “died” more than 380 times since its creation in 2009. Nonetheless, the value of bitcoin is still $6800 USD as of April 21st, 2020. The statement that bitcoin is dead usually includes saying that the value will one day implode, and “go to zero”. Today, oil has beat bitcoin to the punch. Billions of people around the world have stopped travelling in response to COVID-19, as a result the demand for oil has plummeted.
Keegan Francis | Oct 12, 2020
Enter the Digital Revolution
Oil is the prized commodity of the industrial revolution. Now, human civilization has firmly planted at least one foot in the digital revolution. For the past few years, “Data is the new oil” has been a headline trending closer and closer to truth. But there are two internet based assets that are pushing oil off of its long held platform. Data, and bitcoin, (or more broadly cryptocurrency).
Data is a unique asset as it doesn’t conform to the same economic principles that drive other assets or commodities. In the case of oil, its value is derived from supply, demand, and quality. In the case of data, the more of it you have the better. The value of data is only realized after processing and leveraging it with other programs. Bitcoin on the other hand, works exactly like other commodities, using the scarcity principle to its advantage.
Bitcoin is receiving a massive amount of media attention since the COVID crash for several reasons. As world governments scramble to inflate their monetary supply, bitcoin continues to march onwards at its regular pace of inflation. People are watching, and speculating on the scarcity of bitcoin as an asset in the digital era. Some Americans are even going so far as to spend their stimulus checks on bitcoin. To top it all off, bitcoin has lost to oil, in the race to get to $0. This fact is something the crypto community will revel in for years to come.
The Heyday of Bitcoin
Bitcoin is in its heyday. We are just 20 days away from the bitcoin halvening event. The halvening is when the bitcoin network cuts the already steady inflation rate in half, bringing it to below 1.5%. In other words, there are currently 1800 newly minted bitcoin each day, and as of mid May, that number will be 900 per day. This fact, coupled with inflated government spending, combined with a steady increase in global interest and demand in cryptocurrencies is creating the perfect money storm. People are beginning to bring bitcoin into the class of legitimized assets and commodities. The Toronto Stock Exchange launched the world first major bitcoin fund in early April. The last barrier to the adoption of alternative forms of money is education.
The Focus is on Money
People are spending more time indoors, and choosing to improve their financial literacy. As people try to rectify their uncertain financial futures, they inevitably come across the unique features that cryptocurrency has to offer. As people study the recent market trends, they may notice that cryptocurrency has made a near full recovery since the mid-march crash. In the whirlwind of uncertainty that the entire world is facing, cryptocurrencies like bitcoin offer something a little more certain to the end user. The price may not be predictable, but the supply is. As people are finding out, the money supply matters.