PETER BRANDT: Well, hello Real Vision viewers. This is Peter Brandt. I've been on Real Vision before. I may not be new to some of you, maybe new to some of you so well, but I am a proprietary trader, have been for 45 years. I'm the founder and CEO of Factor Research and Trading, a firm that was founded at the Chicago Board of Trade. And I'm also involved in a new venture in the last year, which is Bitcoin Live. It's a research firm dedicated to the crypto markets. And I want to tell you a very interesting story, at least to me, it's interesting and this goes back to 2016.
I began trading futures markets in corn and the grains in 1975. And that was my wife, I traded spot forex, some US equities, but primarily the futures markets and in precious metals, the raw materials, stock indexes, and so forth. And that's the world that I lived in. It was the world of initially pit traded commodities. And it became the world of, of course, recognized exchange traded commodities.
And I was aware back in 2012, '13, '14, things started surfacing about this market called Bitcoin, which I didn't understand. And quite frankly, I ignored it, I really had no interest in being involved in it. It wasn't traded at any of the exchanges where I had money to trade. And I was aware of all the hoopla that was going on, but I didn't pay any attention. And even initially, I just thought it was a gimmick market. It was just something that was an experiment and whether it'd be digital gold or just some computer programming. So, I paid very little attention to it.
In early 2016, Raoul Pal, the founder of Real Vision drew my attention to a chart of Bitcoin. I can't remember what it was- January, February of 2016. But I saw the chart and I said to myself, oh, my goodness, I have been missing something really, really special. And the chart, which I'll cover as I get into the chart section of this presentation, just blew me away. And I saw a chart that said there's no reason that I should not be involved in this Bitcoin market. And that began my adventure in the world of bitcoins and some other cryptos.
Matter of fact, Raoul introduced me to the firm he was trading Bitcoin with at a time, a New York firm, which is the firm I continue to trade Bitcoin with. And so, Raoul and Real Vision were definitely a part of my Bitcoin story. And I'm sure glad that he introduced me to Bitcoin, the Bitcoin has become a regular part of factory tradings, market Lyst to trade, it was our most profitable market in 2017, of course, in 2019, and it's been a good market to us, of course,, 2018 crypto has primarily declined. And as a futures trader, I'm not happy with Bitcoin futures at the CME so I do not trade cryptos for the most part on the short side.
So, it's a market that I've come to love, and I'd really want to make pretty bold statement and that is, Bitcoin is quite unlike any other market that I have been exposed to or have traded in the last 45 years. It is a one of a kind market. It is a special market. It is a market that eclipses the price action of every other market that I had been involved with. And I'm going to go through some charts that I hope to demonstrate that case. And I know that as Bitcoin was an esoteric undefined market to me back in 2016, it may be to you now. And so, as a point of comparison, I want to contrast Bitcoin with markets that you may be familiar with, everybody's familiar with this spectacular story of the Amazon stock, as well as other asset classes.
So, I'm going to make a point of comparison between Bitcoin and some of these other stocks and asset classes just to point out really what a spectacular story Bitcoin has become, and probably will continue to be. So, let me run through these charts and make my case.
Okay, let me make my case that Bitcoin is a market like no other market, at least, it's a market like no other market I've traded. And I can show you some charts and a table that will make that case. This is the chart, or a replica of the chart that Raoul sent me be back in early 2016. Now, this chart may look like just a bunch of noise and a bunch of lines to you. But if you have any acquaintance with the classical turning principles of Richard Bach from 1933, or Edwards McGee from 1946, you will recognize that this is a very special chart.
And it's special because it complies with the principles of classical charting almost to perfection. So, this chart complies with the principles of classical charting, unlike any other chart that I have seen in my days, and so you will see that there was this massive parabolic move that took place in 2012, 2013. And even in 2014. And during that move, we had some classical charting formations that took place. And we had a bear market correction in 2014 ending in early 2015, where we went into a rectangle. And this is a chart that can be easily explained using the geometry of classical charting.
So, that initially drew my attention to this chart and said, wow, I'm missing something here. I'm trading all these other markets and there's no other chart that I can look at that more adequately comply with the classical charting principles that I use to trade. And so, I became quite interested in this chart, but not only did it comply, but it looked to me to be a chart that was about ready to launch into outer space. And the reason being that this chart is based on log scale, and I'll talk about that in a minute, there's a very big difference between a chart that is presented log scale and a chart that's presented in arithmetic scale.
And especially, a chart that puts in a parabolic advance on a log chart, it's a very special beast, and entirely, it just does not happen very often. And here we had a two year bull market that net parabolic categories in Bitcoin and that truly was something that was extremely impressive. And so, I began my career as a Bitcoin trader. Now, I mentioned that I wanted to compare Bitcoin to some other markets that you may be familiar with, here's a chart of Amazon dating back to the late 1980s or 1990, 1997 to 2019 highs, a 1500 and 64 fold advance in the price of Amazon. That being that if you take the price from 1997 and multiply that by 1564, and you get the high that we had. So, that's what I mean by an X fold advance.
But I want to point out that this is an arithmetic scale chart, which means the height difference on the chart from $200 to $400 is exactly the same height as an advance from $1800 to $2,000. And what that means is that for a bull market to occur on a log scale is very, very special indeed, you can have a bull market on an arithmetic scale, and it does not make it as special as a bull market on a log scale. And so, let me show you what I mean by that.
We'll take a look at the Amazon chart again. And this time, going back to 2016. And you can see that Amazon indeed, not the rough criteria of being a parabolic advance on an arithmetic scale. But now, when we take a look at Amazon, in this case, we're looking at Amazon on a log scale. And we can see that it does not meet the parabolic definition on a log scale. Here, it's a linear advance. The red line shows what would have happened if Amazon would have met the definition of a parabolic advance on a log scale, in which case, Amazon would currently be priced somewhere in the area of $50,000 a share. And so, that gives you a point of reference between being a bull market or parabolic advance on the log scale versus an arithmetic scale.
This is a graph- and I want to show you really the significance of the advances that we've had in Bitcoin relative to some other asset classes. Look down to the bottom and you can see that in 100 year period indicates of gold at the very bottom line. The bottom of gold in 1919 through the high in 2011, gold experience at 93 fold advance. Look at a couple lines at Dow Jones Industrial Average from 1903 to the recent highs from last year in the Dow, represented an 873 fold advance. Apple from 1982 through the recent highs last year at 1400 and 48 fold advance. Amazon, which I've already pointed out to you, moving in 1997 print dollar 31 to a high 2050 or 1500 and 64 fold advance and that show Netflix.
Now, go up above and look at that as a point of comparison. While we're dealing with age distances in the case of gold 100 years, in the case of Dow going back to 1903, which is 115 years, you'll see that from October 2011 through December 2017, period of just over six years, Bitcoin had a 9765 fold advance, and $2 wasn't even the low because during the late 2010, early 2011 period, we had Bitcoin trading at a nickel. And so, what I've done there up in the top, I've taken a look at some of the parabolic advances that have occurred, phases that have occurred in Bitcoin during the period dating back to 2010 were we've seen a series really three different parabolic advances.
So, not only one parabolic advance, but three parabolic advances on a log scale, unheard of. There's no other market that you're going to find that exhibit the ability to put in parabolic advances on the log scale, Bitcoin is unique. And we've had three of them. First one of 483 fold advance, then from 2011 through '13, 571 fold advance and then from January 2015 through the December 2017 high, 119 fold advance, combining for a total of a 9764 fold advance from October of 2011 through the 2017 high, unheard of. Nothing like it, nothing like it in history.
As a matter of fact, I was curious and looked back, was there any other market ever that had that advance? And indeed, there was. There was the yield rate, German interest rates during the 1920s hyperinflation, you can plot yield and see the same parabolic advance. That's the only chart that I found in the last hundred years have exhibited the upside power to produce multiple parabolic phases on a chart on a log scale.
So, here's a chart that does show the three parabolic phases in Bitcoin on a log chart dating back to 2010. And we see these three phases of parabolic advances unheard of, you won't find another chart that you can identify, and these have combined to produce an 8858 fold advance from the 2011 low, quite amazing indeed. And so, this brings up the question then what next? We have seen an unprecedented advance in the Bitcoin market in just a very short period of time. And so, one might ask the question, what happens next? And that is what I will turn my attention to.
So, I have gone through the charts and the table and I hope that I made the case that there's really nothing quite like Bitcoin. It is a one of a kind. But that begs the question, where do we go from here? Or as they say in the Midwest section of the United States, what now brown cow? And so, I want to give you a perspective of Bitcoin that I have as a trader, and I need to tell you that I don't understand all of the technicalities of blockchain technology, of the crypto markets, even of Bitcoin. And there's a lot of mysteries still for me and I've never really dug deep into how it all works. But I am familiar with Bitcoin's value propositions and I know that Bitcoin as a target market is a wonderful market. And so, that's the caveat I would have when I go through some charts that I hope to show you that layout where I think Bitcoin goes from here is I'm basing this based purely on price action I'm a charter, so I trade price. And so, with that in mind, let me show you where I think Bitcoin will go here in the near future.
Bitcoin has been a market of extremes. We have seen massive swings in Bitcoin during its pricing history. You'll take a look at here at the declines we've had over time, massive declines, massive parabolic advances, the massive declines and you will see bear markets that have taken place in Bitcoin along the way starting at the bottom in 2011, 94% correction. 2011 another correction, 83% correction. In 2013, 82% correction. 2013 to '15, 86% correction. Of course, from the December 2017 highs to the December 2018 low is when 84% correction.
So, we've seen massive parabolic advances. We've seen massive setbacks or declines unlike anything again that you've probably traded in, in global equity markets, forex markets or futures markets. And this is the type of swings that really went plotted on a chart, on price chart based on classical charting principles have had ordered to them and that is another thing that attracts me to the market. And so, here's the question that I raised and I'll try to answer it is has a new parabolic advance begun in Bitcoin? And that would be off of the December 2018 lows. Marked on here is the three previous parabolic advances on a log scale and have we began a new parabolic advance?
And I think a case can be made that we have indeed mainly because we're coming off of that 84% correction from the 2017 high into the late 2018 low. That's the kind of correction that we've experienced in Bitcoin that has launched new bull markets. It has been the seeds from which new bull markets was sprouted, and we have that again. There's also a tendency for markets to form parallel channel trading patterns and in this, we have in Bitcoin coming up the 2013 high. We can see that the end of the cycle parabolic advance and the entire 30 parabolic advance leading to its decline or correction have fallen into a nice channel pattern.
We've held the bottom of that pattern and now we could head in back up in another parabolic advance toward the top. And I will just point out that this top in early 2020 would bring Bitcoin prices up into the area very close to $100,000. And you think, wow, a $100,000 move from these recent lows. That's only a 33 fold move, which for Bitcoin is very mild. So, might one be outrageous and saying we're going to see a 33 fold advance in Bitcoin from its late 2018 low to what might become a 2020 high? No, that's actually not a bold prediction at all. And so, I think there's a very good possibility indeed that we will see that.
Well, that does it for me as part of this special Real Vision crypto week. It's just been my privilege and honor to participate in that because as I pointed out early, Raoul Pal and Real Vision and Bitcoin have a certain marriage to me that's special and so I largely owe my involvement in Bitcoin to Real Vision and I thank Real Vision and Raoul for that. I hope I've made the case that there's really nothing quite like Bitcoin. And I use Bitcoin, of course, as the proxy for cryptos because I think Bitcoin is crypto and crypto is Bitcoin.
And as a trader, I look at it this way, I think that there's a 50% chance that Bitcoin goes to 50,000, 100,000 and who knows what happens after that? It depends whether Bitcoin of course becomes recognized as part of the global reserve currency group basket. And there's a 50% chance it becomes worthless, and I'm sure Bitcoin maximalists watching this dread as I say that, but that's how I look at it. But even at that, 50% chance of 100,000, 50% chance of being worthless, what a wonderful, asymmetrical trading opportunity that is for me. So, I just look at Bitcoin as a trade- a special trade, but as a trade and my goal in Bitcoin is to risk approximately 10% of my investable liquid net worth into the Bitcoin market, but to use certain tactics to at least try to minimalize the downside risk in case of the zero valuation is a thing of the future.
And I think that's a legitimate way for investors and traders to look at it, is that they need to have some part of what they do is Bitcoin, whether they trade Bitcoin, whether they trade Bitcoin for one month, two- month, three-month position type trades or whether they buy and tuck it away for a long term. Bitcoin has been really quite spectacular, and I think it will continue to be a very special market in the years ahead. So, again, for Factor Trading, and my participation in Real Vision, I thank you for staying with me for this amount of time.