In the original version of this blog the author had bitcoin at eight years old, it has been updated after he realized it is now 2018.
Most people are aware of bitcoin and the Bitcoin network as being proposed by Satoshi Nakamoto in a white paper (www.bitcoin.org/bitcoin.pdf) that was published in October 2008. However, the real birthday (at least in my mind) for bitcoin is January 3, 2009. On that day the first block of 50 bitcoin was mined which is now worth $740,000 based on yesterday’s 4:00 pm Gemini settlement price of $14,880. By the way it is estimated that Satoshi (he, she, or they) has about 980,000 bitcoin which is worth about $14.5 billion based on yesterday’s Gemini New York settlement.
At only 9 years old Bitcoin would qualify to be a second grader at my kid’s school. Mid-day yesterday I pulled the market cap for the stocks that comprise the S&P 500. Based on pricing at that time, the value of mined bitcoins falls between the size of Chevron and AT&T. This would make the cumulative value of outstanding bitcoin the 15th largest stock in the S&P 500. That is, it if were a publicly traded company.
We all know the Cboe Futures Exchange (CFE) was the first listing venue for Bitcoin Futures contracts. For something that was just an idea in a paper a little more than nine years ago is very impressive. Our volume has been respectable as futures traders become more comfortable with Bitcoin Futures and crypto traders learn more about the futures markets. However, when I checked the spot market yesterday about $20 billion worth of bitcoin has changed hands. This comes to just over 14 million bitcoin or about 8% of the bitcoin that have been mined over the last nine years.
Working for Cboe I spent a fair amount of time discussing bitcoin and blockchain at various holiday functions. And I just don't hang around financial people, the doctors and lawyers are asking questions as well. This was not the case just a year ago when most questions would be about the overall stock market or maybe VIX. I had a difficult time comparing the rapid rise in the level of interest in cryptocurrencies to anything else I’ve experienced in my 30-year career in the markets.
The big question at this point is what’s next. In nine more years when bitcoin will be a teenager will it be a globally accepted medium of exchange and store of value or will it have gone the way of many other great ideas that were before their time? After the appreciation from bitcoin in 2017 it appears many are betting on bitcoin being around for its eighteenth birthday and beyond.