Bitcoin is the best performing asset of 2019

Gold? Increase of 17% since December 31. Stocks? The Standard & Poor's 500 index was 21% through September 30. Bonds? 10-year US Treasuries are yielding just 1.6%, close to their historic lows.

Moreover, bitcoin? Cryptocurrency prices ended the third quarter at around USD 8,308 per unit, according to data provider Messari, up 114% this year. Investors who bought on the last day of 2018 would have doubled their money, and more.

On Wall Street, one of Bitcoin's main criticisms is that it was invented only a decade ago (a baby by old world standards) by a computer programmer (or programmers, no one knows), without any real foundation, or underlying value. It's just an invented thing, as they say, with a volatile price that only derives from what the next buyer is willing to pay.

However, with the slowdown of the global economy and the trillions of dollars of European and Japanese government bonds being traded with negative yields, this year's bitcoin price gains could attract a new wave of investors who previously wouldn't even take a look.

There are already signs that it is happening. Pantera Capital, one of the first crypto funds, recently scheduled an event in San Francisco for its investors, with the participation of cryptographer and crypto pioneer Nick Szabo. According to Paul Brodsky, Pantera's partner, when word got out, several investors who had never touched this asset class contacted the company to request invitations.

"There's much drama around everything; there's much energy, there's much press," Brodsky said. "We're getting interested from major institutional investors of all kinds.

Value deposit

One of the long-term arguments for Bitcoin is that, unlike stocks and bonds whose prices are often susceptible to the decisions of central banks and governments, the cryptocurrency is independent of sovereign authorities. Instead, it is governed by fixed policies that are codified in the underlying network and are therefore difficult to change.

According to these rules, the supply of bitcoin has a limit of 21 million, so it will not be prone to inflation, as could be the currencies of developed markets, such as the US dollar, the euro and the yen if their respective central banks resorted to more money printing. As a way to stimulate their economies.

President Donald Trump, who ran for re-election in 2020, has repeatedly called for more pronounced interest rate cuts by the Federal Reserve, while accusing China of artificially reducing the value of its currency, the yuan, to gain an unfair advantage in international trade.

Many advocates of cryptocurrency characterize Bitcoin as Gold 2.0, substantially a newer, technologically improved, and more portable form of precious metal, seen since antiquity as a reliable store of value.

"Bitcoin is slowly turning into digital gold, but it's not there yet," said Qiao Wang, Messari's product manager.