Investment oldman Sachs Management
Why Have Cryptocurrencies Rallied So Much? Division
1. Bitcoin Supply Over Time (Million Tokens) 2. Currency Composition of Bitcoin Purchase Volume
Euro = Polish Zloty m British Pound
25 5 100% RUS Dollar m Japanese Yen © South Korean Won m Chinese Renminbi ‘yd |! ' i 90% i "I ia | I i ] PMA ul | a4 80% f A Current Supply ans = 45 - = 60% 2 2 5 50% - ” i= o 40% 2 i) 30% 5 4 20% 10% 0 BYTSRASSIFSSSSELISSISSSSILLSARIB 0% | , , , SexgSsRRGRRKRKSBBSRRRBKHRaAtSAtSnnan 2011 2012 2013 2014 2015 2016 2017
= In addition to speculation, which has been the biggest driver of cryptocurrency appreciation, other drivers include:
= Perceived Scarcity: Bitcoin’s 21 million token cap is expected to be reached in 2140 (16.5 million today). Many of the over 2,000 other cryptocurrencies, however, do not have a capped supply. Further, while unlikely, bitcoin’s token cap could be raised if a consensus of programmers decided so.
= Desired Safe-haven: Increased global participation reflects desire for an asset independent from governments or central banks (“digital gold”). Many governments from which investors have sought diversification, however, have recently banned domestic crypto-exchanges.
10 HOUSE_OVERSIGHT_025673
Source: Investment Strategy Group, Bloomberg, Cryptocompare.com.