- Demand in the form of increased value for digital assets, beyond financial speculation.
- As we will emphasize later, institutional interest, although in our experience it is increasing, is unrelated to demand.
- Mining in the form of periodically halving the reward for mining bitcoin.
- The dollar in the form of a fiat currencies with decreasing confidence following the 2008 global financial crisis, the use of measures such as “quantitative easing” and the current mini currency war between the US and China.
Crypto and Raw Materials – Lessons from 25 years on the raw materials market. Before my partner Daniel Masters and I discovered cryptocurrencies in 2013, we were active in commodity trading for almost three decades. One of the features of bitcoin that appealed to us back then was the limited supply, which is limited to 21 million Bitcoin. This characteristic shares similarities with the finite nature of gold or silver. Well-known patterns The longer I work with bitcoin now, the more I see similar patterns emerging. Firstly, one of the rules for success that we used in our Global Advisors Commodity Investment Fund in 2002-2007 were the “three Ds” — demand, depletion and the dollar. In a sense, the same forces are now present in the digital asset ecosystem: