US dollar has lost 99.99% of its value against Bitcoin ๐จ This article is 5 years old...
US dollar has lost 99.99% of its value against Bitcoin
2 min read
Updated: Nov. 7, 2019 at 2:52 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The price of the world’s largest cryptocurrency increased by almost 170,000 percent in the past seven years, which caused the United States dollar to lose nearly 99.99 percent of its value against BTC. The trend is surprisingly similar to the behavior of Germany’s Papermark during 1920s hyperinflation.
Bitcoin’s price trajectory looks a lot like the old German gold mark
The novelty of the crypto market has made predicting its future seemingly impossible. Many analysts have tried comparing the volatility of crypto assets, especially Bitcoin, to those of traditional markets such as stocks and bonds but never managed to find a correlation that would explain the coins’ trajectory.
However, a recently published data chart found incredible similarities between Bitcoin and the long-abandoned currency of the Weimar Republicโthe Papiermark. According to planB, a cryptocurrency analyst, the US dollarโs price against BTC has decreased by 99.99 percent since 2011.
The chart compared the relationship between Bitcoin and USD with the relationship between Germany’s Papiermark and its predecessor, the Goldmark. Introduced in the German Empire in 1873, the Goldmark was on a gold standard until it was replaced with the Papiermark in 1914.
$USD lost 99.99% of it's value … against #bitcoin 2011-2019 pic.twitter.com/BeUq4yBeND
— planB (@100trillionUSD) May 27, 2019
The outbreak of World War I broke the link between the Goldmark and gold which led to the switch to paper currency. As a result, the Papiermark became a symbol of the 1920s hyperinflation.
USD value against BTC follows the trajectory of the Papiermark
PlanB’s chart showed that Bitcoin’s performance against the USD in the past eight years looks incredibly similar to the last five years of the Papiermarkโs devaluation. According to the chart, one Papiermark was roughly equal to a Goldmark at the beginning of 1918. By 1923, however, one Goldmark was worth one trillion Papiermarks.
The analyst likened the events to modern-day quantitative easing, a policy where central banks increase the money supply by purchasing government bonds or other financial assets.
While many experts are divided on whether or not Bitcoin could replace gold as the ultimate store of value, cryptocurrencies have seen increased use in countries battling with hyperinflation. Furthermore, Bitcoin’s scalability issues have made many question its use as a universal payment system. Other, however, have argued that its recognizability and market cap will give it a key place in the future economy.
Gold 2.0?
Brendan Blumer, the CEO of Block.one, argued that Bitcoin’s ability to be a store of value will remove any need for scaling, and called the cryptocurrency “Gold 2.0.”
Over the next two decades, #Bitcoin will replace #gold as the leading commodity to store value
— Brendan Blumer (@BrendanBlumer) March 17, 2019
Bitcoin Market Data
At the time of press 2:52 am UTC on Nov. 7, 2019, Bitcoin is ranked #1 by market cap and the price is down 0.7% over the past 24 hours. Bitcoin has a market capitalization of $153.37 billion with a 24-hour trading volume of $24.12 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 2:52 am UTC on Nov. 7, 2019, the total crypto market is valued at at $271.81 billion with a 24-hour volume of $81.07 billion. Bitcoin dominance is currently at 56.36%. Learn more about the crypto market ›
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Bitcoin
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Block.one
Block.one is a software publisher specializing in high-performance blockchain technologies.
Based in Hong Kong, Brendan Blumer is an American entrepreneur, executive, and investor who currently serves as the CEO of Block.one.
