Imagine stepping into a time machine and traveling back to 2010, when Bitcoin was worth just a few cents. Would you risk investing in everything you had? Or, what if you traveled to 2021, when Bitcoin hit an all-time high of nearly 70,000 USD, only to see it crash months later? The fluctuating expectations surrounding Bitcoin reflect its volatile nature and the ongoing debate about its value and future potential.
Bitcoin was first started on Jan. 3, 2009, by an anonymous person or even a group called Satoshi Nakamoto. Being the first cryptocurrency to be created, Bitcoin was designed as a decentralized alternative to traditional money. No central authority, such as a nation or financial institution, controls digital money. Also, due to its design nature built on a blockchain, all transactions of Bitcoin are transparent, secure, and irreversible. Currently, around 20 million coins are already mined, leaving only 1 million coins to be mined.
As time passes, Bitcoin becomes scarcer and scarcer, raising its price unprecedentedly high. Bitcoin reached its new all-time high of nearly 11,000 USD in December of 2024. Although the price has dropped a little from the peak, some analysts say it could reach 200,000 USD by the end of the year. There are several reasons they are optimistic about Bitcoin and the cryptocurrency market.
Last year January, the Securities and Exchange Commission (SEC) approved the Bitcoin exchange-traded funds (ETFs). Before the approval, directly buying cryptocurrency was a hurdle. Yet, since ETFs are easily tradable like stocks, more investors were indirectly and directly exposed to buying Bitcoins. At the current time, there are 12 spot Bitcoin ETFs available.
The inauguration of US President Donald Trump also gathered investors in the cryptocurrency market. During his campaign, Trump promised a crypto-friendly environment that could boost the industry. He even promised to fire the SEC chairman, Gary Gensler, who did not favor the crypto industry. As Trump took pro-crypto approaches, the expectations went high, with Bitcoin price catching up and peaking when he took office. Just days after his inauguration, Trump signed an executive order initiating efforts to establish a national cryptocurrency stockpile, fulfilling one of his campaign promises.
On the other hand, critics warn of cryptocurrency’s potential collapse. Nobel laureate in economics Eugene Fama predicts that Bitcoin will lose all its value within the next decade. In an interview on the Capitalisn’t podcast, Fama explained his reasoning: “Cryptocurrencies are such a puzzle because they violate all the rules of a medium of exchange,” he added, “They don’t have a stable real value. You know, they have highly variable real value. That kind of medium of exchange is not supposed to survive.” Another pessimist, Microsoft co-founder Bill Gates, criticized cryptocurrency. He finds no value in crypto and believes the crypto rally is just another foolish gambling in the bullish cycle. “There are people with high I.Q.s who have fooled themselves on that one,” Gates stated in the interview with The New York Times.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
