Bitcoin: The Best Performing Currency For A Second Year In A Row

Tyler Durden's picture

Bitcoin is no stranger to extreme fluctuations. As Visual Capitalist's Jeff Desjardins notes, for each of the last four years, the cryptocurrency has either been the best or the worst performing currency – with nothing to be found in between.

Luckily, for those that follow the digital currency closely, those fluctuations were mostly pointed in an upwards direction for 2016. The currency finished the year at $968.23, which is more than double its value from the beginning of the year.

Bitcoin the best performing currency in 2016

Were any other global currencies able to compete with bitcoin’s strong performance throughout the year?

The following chart compares major currencies (paired with the USD) over 2016:

Bitcoin performance vs other currencies

Brazil’s real rallied 21.9% on the year, the most in seven years. Traders are hoping that center-right President Michel Temer can ease public spending following the departure of Dilma Rousseff.

Russia’s ruble also finished the year with double-digit gains, up 17.8% against the U.S. dollar. This was largely due to the recovery in Brent oil prices, which gained $10/bbl over the course of 2016.

However, a rosier picture for oil was not enough to buoy all producers. Africa’s biggest economy, Nigeria, fell into its first recession in 25 years during the opening half of 2016. Ripple effects from low oil prices caused the Nigerian naira to lose more than one-third of its value throughout the year, making it the worst performing currency (at least officially).

Unofficially, Venezuela’s struggling economy has been pushed to the brink by its ongoing currency crisis. The massive hyperinflation is not reflected in official numbers, since the bolívar is technically “pegged” arbitrarily by the government. Based on black market activity, however, experts estimate that the currency ended the year with inflation of roughly 500%.

Bitcoin in 2017?

Bitcoin is now the best performing currency for two years in a row (2015, 2016):

Bitcoin has been the top performer 3 of 4 years

And in the opening days of 2017, the cryptocurrency has already gained a head start on other global currencies. It passed the vital $1,000 mark in the first days of New Year trading, and could be poised to three-peat for the title of best-performing currency of the year.

To do it again, bitcoin prices would likely need to rise at least 30% on the year, closing in on the $1,300 mark.

Will it be another extreme for 2017 – or will the bitcoin price finally settle for middle ground among other global currencies?

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The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

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HRH Feant's picture
HRH Feant (not verified) Jan 4, 2017 3:06 AM

Best, worst, best, best. Way too risky for me to buy. Nothing but a gamble at this point. If you are afraid of capital controls and the state confiscating everything you own this might be a great gamble. Otherwise? Better places to park some cash.

RedDwarf's picture

Sure, if you're risk adverse stay away from bitcoin.  It's risky as hell.  It could go to zero.  On the other hand you are conflating risk and reward when you claim there are better places to park some cash.  There is a very real chance BTC will be one of the greatest investment opportunities of all time.  If it becomes a major world currency it will achieve 5 or even 6 digit valuation per BTC.

StackShinyStuff's picture

Don't you mean "Teh Best Performing Currency?"  Fonestar?  Draybin? Hello?

RedDwarf's picture

Yeah,  just because I think BTC has a potential future does not mean I'm FoneStar fucktard.  It is possible, believe it or not, for different people to agree on certain things.  Not that I have actually read enough of FoneStar's stuff to know how much we agree on other topics, not do I care, nor will I be able to convince someone like you who probably thinks everyone who has anything good to say about BTC is FoneStar.

philipat's picture

In view of the awful economic fundamentals, anything which cannot be manipulated by the Government and Wall Street will take on a life of its own. That is good news in the short term but Government hates not being in control of everything and my bet is that very soon they will start going after holders of BTC. In fact, the IRS has already started the process. It goes along the lines of: First where did the money come from to buy the BTC (and did you pay tax on it) and, Second, when you sold it or used it at a higher value than you paid for it, you made a capital gain and should again pay tax on it as with any other investment. The Feds are NOT going to tolerate unregulated BTC much longer, especially if it grows in importance and becomes a threat to their Fiat franchise monopoly. Not saying that's right or fair but just that's the way the Feds operate.

I'm still happier holding physical Gold and SIlver because the manipulation must end soon, especially with all the legal threats against the Bullion Banks now developing. In fact, I think the reason that  PM's are rallying now is, in part, because the BB's are worried about ongoing blatant manipulation in the face of legal threats. Even if it is "confirmed" that the BB's are merely acting as the Agents of the CB's and BIS, that will be enought to allow the PM market to take on alife of its own and recover the value lost by manipulation over the last several years.

Hail Spode's picture

Agee philipat. Gold and silver are being manipulated by the big banks so connected to the government. Bitcoin is not (yet). So not a fair comparison. I think right now governments want bitcoin as an alternative to gold and silver- currency flowing there is money that might otherwise go to the traditional alterantives to national currencies. They will either move in and make digital currency their own or suppress it when its usefulness to them is less than its threat. Whenever you are not using something for money that would have value even if it were not money, then its not really money!

 

Arnold's picture

Well without changing definitions much, Bitcoin is being manipulated.

The Chinese seem to be moving funds out of country, contrary to their law.

There is not a stable exchange rate,

and a skim for the exchange for Yuan to bitcoin to usable fiatski,

a FX play out of control since there is only one viable road for this series of transactions.

 

The cost of doing business in Bitcoin is going up for the time being.

Arguably inflationary.

Bubble? Ponzi? Investment?

PS, Please do not give anyone educated in the sixties crap about math skills.

We may not have a corner on Einsteinium, but many of us can balance a checkbook in our heads.

mrees999's picture

Bitcoin itself can be fairly traceable given enough patience and time. With the shortage of manpower and the overall tiny bit of money in relative terms, there is much bigger fish to fry for the payoff they would get in the scale of time and effort required to detangle every transaction  I that I believe you'll see not much traction on that front.

They may try to track down a few huge whales or if they suspect a terrorist trying to use it - but at any point a holder of BTC might 'accidently' forget the key or claim somebody stole it, or their hard drive crashed... then perhaps file a claim of some sort?  Perhaps take it as a tax write off?

Then there are plenty of other digital currencies to trade in and out of that our called "Zero Proof" where it is litterally untraceable through onion ringed group transaction that mask everything include amounts and addresses it came and went.

 

So keep trying to rationalize why gold and silver are better.  How many decades is the "maniplulation is going to end soon" story going to be meaningful when you already see your escape pod rocketing away without you?

 

StackShinyStuff's picture

Calm down Red.  Wasn't even talking to you.  You know damn well how the daisy chain on the first comment works. You just got caught in the line of fire.

RedDwarf's picture

It's not a daisy chain.  You can respond to anyone or post your own top level post.  It's indented horribly and hard to read the threads, but you do have full control over who you respond to.  Now, I know a lot of people respond the next level down so they get more views, but don't do it.  Respond at the appropriate level.  I can't read your mind and assume you're not responding to me when you opt to literally post a response to me.

Restorative_Ally's picture

So I'm supposed to buy this bitshit, which:

1. Some people who I don't know and I probably wouldn't like just came up with one day and zapped it into existance

2. Isn't backed by anything at all

3. and I'm supposed to trade real labor and property in exchange for this bitshit which is making the creators insanely wealthy and unduly powerful?

How is this different from what I already have in my bank account, again? 

RedDwarf's picture

To point 1, yes people just zapped it into existance.  People just zapped the idea of calculus into existance as well.  Just because something is not tangible or is new does not negate it's usefulness.

To point 2, I'm not sure what you mean by 'not backed'.  It is in fact backed.  It is backed by what is now one of the largest network systems in the world.  There is a lot of very real infrastructure behind BTC now.  If you mean 'not backed' in the sense that it's purely digital, well, the same is true of most things of value.  Love, culture, tradition, etc.  Again just because something is not tangible does not mean it's not useful.  Money is nothing but a social construct you know.

As to point 3, most of the BTCs are in the hands of different miners.  Now, maybe one of those bigger groups is a front for the creators, but whatever.  It's no different than the people who IPO a company getting a huge payout.  It's not like it's a Ponzi scheme or anything like a lot of ignorant people like to claim.

As to how it's different than what you have in your back account, it's the opposite in various ways.

1.  It's not created through debt or fractional reserve voodoo.

2.  It's not fiat.  The free market sets the price, use of it is totally voluntary.  No government is forcing you to use it.  It is free market money.

3.  It's of limited supply.  There will never be more than 21 million BTC.

4.  It is not tracked or controlled by a central authority.

highandwired's picture

"most of the BTCs are in the hands of different miners"  <--- not a correct statement.  Miners mine BTC, they don't necessarily hold BTC that they mine.  They usually sell most of what they mine to pay bills and such.  

 

I will agree however, that most BTC mining takes place in China.  In reality we do not know who holds BTC and I'm sure it's more and more people every single day judging by the rising price

Pseudonymous's picture

I think RedDwarf was referring mostly to those early miners who kept their bitcoins because bitcoin mining wasn't even a business yet. There wasn't even a market. This was done by people who happened to be well positioned to appreciate the potential future benefits of mining some bitcoins. At the time it only served to keep the network running. Naturally, the creator was one of those well positioned ones, so he mined an estimated 1 million BTC, about 6% of all BTC currently in existence. The project was announced before the launch, the source code was public from the start, mining was open to anyone from the start, so I see no reason for accusations of unfairness or "undue power".

RedDwarf's picture

Both actually.  If I was a BTC developer it would make sense to mine and save some BTC at the outset, and it would make sense for me to then work to push for it becoming a popular technology.

Itchy_Balls's picture

Random thoughts echoing yours:  

Zerohedgers:  Please avoid this snake oil BC scam at all costs...I have a lot more Bitcoins to buy and would prefer to do so a lower prices before the dumb money gets on board.

Gov might "hack" one's gold supply with SWAT teams - it is no less likely or possible than them hacking your BC wallet if they want so that argument seems moot.  

BC is of course backed by something:  its rich feature set.  

I am dollar cost averaging into BC monthly.  Compared to my gold and cash it is currently a small pile but it's growing and so is my confidence.  I love my gold but damn compared to BC it is illiquid, immobile, non-transferable, easily stolen, and generally a pain in my ass.  

I can literally send my BCs to anyone in the world nearly instantaneously without giving a rat's ass what a bank or government thinks about it.  I can park it in a paper wallet off grid and untouchable.  I can fly to Costa Rica or Hong Kong and my BCs are accessible to me and only me (assuming I exercise appropriate security measures).  

I am not an eloquent man but in my gut I feel there is something revolutionary going on with BC.  It is disheartening that so many zerohedgers can't or won't smell the roses.  

I can't really put it completely into words but the (more) decentralized aspect is part of it.  So is the impersonal, math-derived vetting of transactions - the COLLECTIVE agreement of the network decides which transactions are real, relatively immune from the arbitrary, error-prone, and potentially corruptible interference of humans.  

It would theoretically take A LOT of computing power for a transaction to be hacked - it is arguably impossible because you are trying to override the consensus of an entire P2P network.  Compare this to a bank account that our rulers can simply abscond with indiscriminately.  People fail to understand the gov really doesn't have a choice in this.  They can try to put up roadblocks but networks ALWAYS adapt to circumvent roadblocks.  

All the money and legal power behind the entertainment industry but STILL torrents are swapping files til the cows come home.  It ain't ever stopping even though they want it too.  It's like trying to kill a swarm of bees with a BB gun.  

They can create headaches and exercise fear and intimidation tactics but this tech (IMHO) is very likely to be a game changer on the level of the printing press and combustion engine and possibly written language itself (OK maybe a little too much enthusiasm).  I am well aware that some of my enthusiasm may be based on hope more than reason, hence I am dipping my toes in gradually.  Ultimately though I'll probably own just as much BC as precious metal.  

I just see it as one more (very powerful) way to diversify out of GOV.

RedDwarf's picture

One of the more interseting aspects of the blockchain technology has to do with a revolution in transactional trust management.  There is a very good TED talk on this subject by Rachel Botsman.  When the blockchain technology came out, most people did not trust or understand it.  Now over the years, people are beginning to understand it and the internet and decentralized trust sytsems.

As Rachel points out, to trust something you have to build the trust stack.

1.  You have to trust the idea.  This is where a lot of people are still stopped at.

2.  You have to trust the platform.

3.  You have to trust the person.

The blockchain removes the 3rd piece.  No centralized authority means a shorter trust stack.  This is why blockchain money is so useful for facilitating transactions, meaning it is more efficient.

https://www.ted.com/talks/rachel_botsman_we_ve_stopped_trusting_institut...

webmatex's picture

Faster to transfer and cheaper fee than anything else.

Plus you are your own bank.

No paypal - reason number 1.

kamikun's picture

Excellent points here. Will steal.

c0nan's picture

There's a lot of math behind bitcoin. I think one of the problems with bitcoin for the older generation it's conceptually difficult to wrap your mind around. How could this non-physical 'think' have value? However, that does not change the fundamental facts underlying the digital currency. Bitcoins are rare, it must be mined, it's finite, it's divisible, it's virtually untraceable, it's not centrally controlled, etc. Do some research on it, it's worth your time. A small investment in bitcoin isn't a bad idea, and you can use it like a real currency. I use it on overstock.com, i.e. I can buy most of my every day need-to-live items using bitcoin. Even if govs ban bitcoin, bitcoin will persist because it would require shutting down the internet to stop bitcoin. The IRS will shout, pound their fists on the table, but they cna't track bitcoin (if you don't want to be tracked). They would know how much you spent to buy bitcoin, but not what you bought with it. The future is digital, it's online. Amazon is taking over the world. Eventually in your lifetime you will grocery shop online. I.e, cash will be irrelevant for most of society. If we don't choose a digital currency one will be chosen for us. Stop bitching, and do your homework. At some point we need to go out on the limb, i.e. put our money where our mouths are in regards to 'fighting the evil cabal'. Fiat money is their number one tool for world control. Bitcoin is not fiat.

p.s. all bull markets must first climb the 'wall of worry', i.e. most people miss the early stages of a bull market due to lack of knowledge, uncertainty, and fear. The smart money is already in bitcoin. the next phase will be up to $2k, and then somewhere between 2 - 3k the public will finally 'get it' and jump in. Hopefully you have a position before then. Buy the dips.

Pseudonymous's picture

> If we don't choose a digital currency one will be chosen for us.

I like that quote.

RedDwarf's picture

Besides a lot of BTC adaptation is in 3rd world countries and overseas anyway.  BTC is becoming a mainline currency from the bottom up, especially in places with issues like Kenya and Somalia.

In fact, what I see happening with BTC is that people overcome the hurdle to get into it when the SHTF, especially with capital controls.  Greece, Kenya, China, India, etc.  Here's the thing, there is a hurdle to overcome to wire BTC into your infrastructure, but once done it's done.  So I see BTC adaptation like the tide coming in.  It just keeps infiltrating into places when the situation if favorable, and once there it's there to stay.

In other words, BTC is akin to an 'invasive' plant or species that thrives best in times of economic chaos and uncertainty or places with little infrastructure.  So I think it will continue to grow because I see that being the main story for the next decade or two.

breaktwister's picture

You are correct in that it is "not backed by anything" but neither are any of the other currencies in use around the world today.   

You understand that governments can and do print uncontrollably causing a reduction in value of existing fiat.  Bitcoin is limited to 21 million in total - FOREVER.   So yes, you should swap at least some of your increasingly worthless fiat for bitcoin while you have the chance.

 

Golden Phoenix's picture

As a 'Proof of Work' entity, Bitcoin is the product and proof of labor. The Bitcoin ecosystem isn't owned by anyone. It has no employees, no president, no shareholders. No one is even quite sure who the creator is. He published his innovation under a pseudonym and essentially vanished.

No, you're not supposed to buy any. A lot of people who hold Bitcoin never bought any. They receive them in exchange for goods or services just as is done with USD. They create their wallet to hold their bitcoin using the Bitcoin Core application and then shift the wallet to hardcopy completely avoiding exchange risks.

The difference between bitcoin and what you have in your bank account is bitcoin is going up and what you have in your bank account has lost 98% of its value in a few generations by the design of central bankers. Bitcoin losing value over long timeframes is a risk. The USD losing value over long timeframes is a guarantee.

mrees999's picture

Restorive - pro-tip before spouting off on something you obviosly know nothing about - know that the next person can read your statment and within seconds do a Google search and see right away you are full of shit.  Maybe you should do that as a quick sanity check to verify you're not killing any remaining credibility by the next smart person who is educated on the subject calling you out on it.

This didn't just "Zap" into existance. THere was decades of research by some of the top professors in computer science working on it. It was predicted by Nobel economist Milton Freeman in the 90s (youtube the interview). Look up Adam Beck, David Chaum, Nick Szabo, and other early contributors that all build inventions over the decades that where all incorporated building blocks to what was released as bitcoin. Then look at the hundreds of improvements that continue to be developed since then.

Christ, do a little research rather than pull this crap out of your ass , then look like one.

 

BennyBoy's picture

 

Buy at the top!

New all time highs and publicity means it can only double in a short time!

mrees999's picture

That really underestimates it to be honest. Go back and look at its price chart since 2011. Each spike in price, was eventually quadruppled on quintuppled in the next spike.  Why did you say "ONLY" double when the proof if verifyable?

 

 

asierguti's picture

Risk is defined as not knowing what you do, plain simple.

 

I wonder how many people who are buying bitcoin know EXACTLY how bitcoin works internally, and how many just because it's going up.

 

Yo talk about becoming a world currency. This judgement is based on what? I would like to know what can make bitcoin become a world reserve currency.

MoonSun's picture

I have been giving thought to this for a while and I have reached the conclusion that Bitcoin is a risky bet, but it is also definitely worth trying. My view is that there is so much debt around the world that governments will increase pressure confiscating all assets from people except... ¡Bitcoin! 

Why? Because it is too damned hard to confiscate and it is a true innovation. And all countries want "true innovation". They will confiscate cash via inflation, as they have always did, raise property taxes, especially on second homes, hike social security contributions, subdue retirement payouts, put guilt on those who don't offer themselves as a sacrifice to the rulers. This will happen because we have lived well over reason, the debt around is unsurmountable.

So, as I said, Bitcoin is a "true innovation", it brings high-quality jobs and governments can keep on adding pressure on taxes without touching it. The future is clear. 

Offthebeach's picture

The States control all capital. Called fluidity, but its theirs, and theirs to do with as they please. Inflte, confiscate, tax and print.

c0nan's picture

Right, and the dollar, gold or silver is much less manipulated? Cash is dead. Your cash is losing value every day. We have the opportunity to choose our own currency. This is our shot. If we don't choose one, one will be chosen for us, and it will be under the IMF (i.e., evil globalist banker cabal) control. Look at bitcoin again, it has a lot going for it in regards to being a true, open, non-central bank controlled currency.

And isn't money whatever we agree it is? The dollar has zero intrinsic value. So when it's stops being the world reserve currency (coming soon) they the world will unload their worthless dollars, this is hyperinflation (coming soon). Gold is useless outside of a store of wealth, and it's clearly manipulated. I don't believe, unless I missed something, thta bitcoin can be manipulated.

Madcow Kaczynski's picture

Draybin/Fonestar:

It's spelled "the", goddammit.

That said, bashing metals only offers red meat to the Bitcoin bashers. 

I break it down like this:

Money: stored labour

Currency: tradable labour

Cryptocurrency is a stake in the heart of fiat. It is deflationary by nature and is guaranteed to hold and increase value over time.

Gold and silver are also deflationary in the long run, they can only be suppressed by false paper promises until they are not; then the coiled spring goes kablooey.

Paper wallet or memorized key absolves counterparty risk. Fuck the Luddites, this shit is for real. Of course the banks will trot out various lipsticked pigs which we should all ignore. 

The enemy of my enemy is my friend.

Fuck the lizards, hold gold, silver, bitcoin, cash, land, food, guns, bullets, and sharpen your aim and tradable skills. 

We will fucking win and win big in the end.

It is not good vs. evil, it is integrity vs. treachery.

Choose well and prosper. 

Madcow out.

Offthebeach's picture

Taxes baby, taxes. Feral gov will demand taxes in Feral script. From everyone, as now.

So good old gov script has armed, physical force to, like it or FU, force value. Or they, them, nose picking rumdum security will take you stuff and/or 10 years of your life in a concrete, razor wired sheeple pen.

Pseudonymous's picture

That's where the guns, bullets, and sharpening of the aim come in.

mrees999's picture

I don't think anybody here is advising to avoid taxes. But we finally get a say in the matter. And perhaps a say in the way we choose to spend our own money and results of our own labors? There will always be room for the government script when it comes time to pay taxes. Nobody argues that point...do they?

Show me the straw man you are fighting with that angle?

 

 

RedDwarf's picture

My view is this:

Gold is the best store of value we currently have.  Now, I don't like the term 'store of value' since value is a subjective utility function, but leaving that nitpick aside a store of wealth should be physical in nature and intrinsically rare.

Blockchain / BTC is the best transactional technology we have, ie best currency / medium of exchange.

So to me this argues for splitting the roles of money and making the monetary system explicitly based upon this.  Use gold as the store of value, use BTC as the medium of exchange and unit of account.

jmack's picture

umm, monero has increased over 3000% in 2016, so I dont know why he is so focused on bitcoin.

CCanuck's picture

Thanks for the link jmack, however my statement stands, wtf is monero, everyone knows bitcoin, the vast majority of people will never hear about monero.

jmack's picture

     So everyone knows about bitcoin, but will never hear about monero.....  I can see you in 2009,  everyone has heard of gold coins, no one will ever hear about bitcoin, thats crazy talk.

 

     Do you have any concept of how bitcoin became so well known?  If you did, you would realize that monero is following that same process, as will other digitial coins.  In the coming years, central banks and major commercial banks will all put out their own block chain based digital coins to compete in this space, whether they can displace the current dominant coins, or if they are forced into a more symbiotic relationship, is an open question.  

CCanuck's picture

My question is, does monero utilize the mining style that bitcoin used to become the leading crypto?
I'm a layman when it comes to this stuff, however I understand the power of fads and advertising. Can monero compete with the branding that bitcoin has produced?
Don't attack me for asking simple questions that the average layman would ask about the 100's of competing cryptos to bitcoin, I'm just ask'n!

Gold coins been around for thousands of years, I've been exposed to bitcoin info, however never heard about monero, and I'm confident I'm not alone, my statement stands.
Monero? What the fuck is that?

whateverpal's picture

Monero is a private, fungible and untraceable crypto currency. Bitcoin's ledger of transactions is fully transparent, Monero's is fully opaque. Nobody can see who sends money to your wallet, to whom you send money, or how much Monero you hold (vice versa for Bitcoin). Thus, Monero seems to fulfill a vision of a truly anonymous decentralized digital cash.

CCanuck's picture

Thanks for the info pal!
Perhaps monero is a better alternative to BTC, time will tell.

mrees999's picture

WTF is Google.  Type it yourself. Your fingers broken?

 

CCanuck's picture

Making a point you simpleton, i know what google is!
GFY mress999

RedDwarf's picture

Likely because BTC is many times more massive than all the other cryptocurrencies combined.  That being said, I'll look into monero, I've been out of paying much attention to the cryptocurrency space for the last couple of years, just paying attention to my BTC price.

SmittyinLA's picture

bitcoin is money laundering propped up by drug cartels 

Remember that guy in Panama? 

....and all those banks in Panama

crazytechnician's picture

Yeah they were all using bitcoin.

PumpherDumper's picture

Right, because we all know that the bad guys have never used FRNs for illegal activity!  LOL!!!!