Editor’s note: This article from the blue fox notes (ID:lanhubiji), author: Blue Fox notes, the daily planet Odaily authorized reprint.
The browse and read a word called fractal. In simple terms, is to describe the thing itself has a self similarity, such as each valve of a snowflake after amplification showed strikingly similar with the original pattern. This phenomenon widely exists in nature. The fractal English word Fractal, by Maunder Pabo (B.B.Mandelbrot), a common definition is “a rough or fragmentary geometry can be divided into several parts, and each part is (at least approximately) is reduced after the overall shape”. This is reminiscent of the history of the price trend of bitcoin, what are the implications for us?
Bitcoin has ten years of history, the current market value of $about 60000000000 in 2018, the total bitcoin transactions exceeded $1 trillion and 300 billion, more than PayPal and DISCOVER.
(Source:Coinmetrics, stasista, Yassine, Elmandjra)
The surface looks, bitcoin development has a certain scale, but so far, bitcoin is still a great deal of currency volatility, which in 2011, 2013 and the third 2017 big bubble, the decline in more than 80%. This in other investment areas is almost unthinkable.
Bitcoin in a short period of ten years, has experienced many bubbles, showing a certain self similar characteristic.
The fractal history of bitcoin
To understand the future of bitcoin, can look at the history of it.
The past and future as a whole, all of history, in the longer term, with the future together, to form a whole. The so-called past present and future, is defined according to their own needs. The whole cycle of self similarity. With a fancy a little words, is fractal.
So, what does it have to do with bitcoin?
Bitcoin from the past history, the existence of a bubble in a similar cycle, it shows certain repetitive self similarity from 2011, 2013 and 2017 bubble. Interestingly, each similar bubble, bitcoin prices have a certain amount of growth.
As long as the basis of bitcoin itself does not appear fundamental problems, such as code defects, 51% deadly attacks, it will have a chance like other technology products, with gradually entered the mainstream crowd. Of course, if the solid foundation of bitcoin own problems, then the fractal phenomena also exist. This is the premise.
This is the price trend in December 5, 2013 the highest price in the first 2 months:
This is the highest price before December 17, 2017 2 months the price trend:
This is the price trend for 2013 years 12 months more than 1 years after the bubble:
This is the price trend in December 2017 after more than a year of bubble:
This is from 2013.4 months to figure the price trend in March 2019:
From the historical point of view, it has fractal character repeating, and every time than last time to bring more users, the price rise by an order of magnitude. Even at the lowest price of the year.
2012 – $4
2013 – $65
2014 – $200
2015 – $185
2016 – $365
2017 – $780
2018 – $3200
Even if bitcoin fluctuates widely, the lowest price each year it has some support (because each exchange price is not exactly the same, the lowest price there may be some discrepancy, but could represent the interval). If you are a genius or investment good luck enough, every year you enter, can find relatively low, second years will not lose. Of course, the actual do small probability.
Before the fractal bitcoin repetition characteristics in its final price stabilized, there will be in a periodic manner. The fractal characteristic is an inherent property, it will go beyond short-term events (negative or positive) effects. For example, before the Mentougou incident, strict supervision and so on. Before it comes to the highest point, there will be a continuing process of steady growth, and once broke the highest point on time, is likely to accelerate development.
Bitcoin fractal and Technology Adoption Curve
In order to realize the true value of bitcoin, cannot be limited to investment circle, it must move to the mainstream crowd, although more than about 600000 daily active address, in general, is still at a very early stage. Like a app, if the day live about 600000, which is far from the mainstream of the situation.
Purchasing behavior for technology adoption in 1957 Iowa State College curve analysis of maize seed is put forward for the first time, and by Everett M. Rodgers’s “innovation diffusion” book is known, it is the technology adoption process adopted by the crowd has the distinction, of which 2.5% is a new, 13.5% early adopters, early 34% the public is late 34% public, 16% is backward. If in accordance with the current population, is still in the stage of less than innovators, early adopters of the stage. This means that the future of the space is very big also means that the price fluctuation in the future will be great.
According to the technology used in the curve, the real opportunity in the first two stages. Once in the early stage of the 34% mass, although bitcoin still have a chance, but its volatility and its rising rate will be greatly reduced, the cost will be higher.
Therefore, it can also understand the sharp fluctuations in the price of bitcoin in the ten years. In the course of its development in the whole, the present volatility is understandable, as a special commodity, currency, first application scenarios from the collection of speculative commodities began to gradually to the public, to be ordinary users to understand and adopt the needs for a long time.
Bitcoin using fractal phenomenon during the early 15% users, price fluctuations will be greatly. Each wave will have similar characteristics of fractal, and with the growth of each of its fractal will bring new order prices.
And the hype cycle bitcoin fractal
Bitcoin fractal from humanity. Human FOMO, worried about missing the investment good opportunity; there is also a fear, worry about zero. The characteristics of emotional resonance, resulting in periodic change. There are self similarity of each bubble coming and fading process, one of the main reasons for this is bitcoin fractal.
In 2013 after the bitcoin bubble burst, entered a quiet period for a long time, although the 2015 and 2016 began to steady growth, but overall, it is the market to start brewing, until early 2017 there are a lot of money to harvest a few times competition returns, market sentiment began to surge, investors began to worry about the missed opportunity. Even 9 months regulation cannot prevent this market surging, and finally for the first time issued the scrip crazy prices caused the entire market, into a real bubble.
As long as there is a concept and the white paper, a good background of investment agency team, platform, basically amount to. This is completely irrational crazy, no value support. Bitcoin is ascribed to nearly $20000.
Then, those early investors began to worry about this crazy situation is not sustainable, in order to keep the profits to start selling assets, which opened the bursting of the bubble.
There is a lot of power fuel, at the peak of people coming in, are short-term speculators, they don’t care about the technology itself, they are the weak hand of the market, once the wind sways grass will sell, and thus the price situation stampede. The final bull burst into the bear market.
When fall a certain extent, the weak hand chips and early speculators chips have been thrown, and long-term holders will not be sold, this time to enter the market is relatively balanced.
Once the market enters the balance stage, before there are arbitrage institutional investors will gradually admission, and opened a new round of growth.
The evolution of this with the famous Gartner Hype Cycles, also known as the technology maturity curve, or directly call the hype cycle is more appropriate.
According to the evolution of the hype cycle, including we can also see in bitcoin fractal history, this is constantly repeat the process of greed and fear the basic driving force is human.
But it is worth noting that bitcoin speculation in the brewing cycle after a period of time, the mood in the market to start in time savings, here the most interesting point is that it is not always linear growth, in the final to the peak, it will be a steep curve, change rapidly in the short term.
If the bitcoin before the script, fractal is an important feature of price trends. Whether it’s the degree, the hype cycle etc.. If bitcoin itself is not a major problem, which means that the value of bitcoin really stabilized before, will have similar characteristics, it is also a bubble, every bubble has a similar price, but also bring a lot more level promotion. This also means that, for some investors, this is a golden opportunity.
The growth of bitcoin, regardless of the actual use or price growth line, is unlikely to be linear, this also means that the window of opportunity will not always open.
Finally, the special emphasis is purely a theoretical analysis, may be all wrong. Therefore, the omission of any investment decision that must take better control risk, make decisions in their own can afford the risk of the.