By Bernardo Mota Veiga – Strategist & Former Crypto Skeptic
With Bitcoin flirting with the $100,000 mark, it’s an opportune time to reflect on its value, purpose, and the lessons from its journey. This is not investment advice but an invitation to better understand the digital asset that has reshaped financial debates worldwide.
Value Is in the Eye of the Buyer
The price of any asset isn’t defined by its seller but by what someone else is willing to pay. Currently, Bitcoin sellers find buyers willing to part with $100,000 for each coin. But what underpins this valuation?
Back in 2018, Bitcoin enthusiasts claimed it could replace traditional money. At the time, I started paying attention. While I doubted it would replace physical currency, I considered its potential as a medium for online transactions—a natural fit for a digital age.
I even ran some back-of-the-envelope calculations: if 15% of global digital transactions moved to Bitcoin, it could justify a valuation of $1.65 trillion annually. At today’s $100,000 price point, Bitcoin's market capitalization hovers around $1.8 trillion. My "logic" seemed sound. But was it?
A Misguided Hypothesis
My earlier assumptions were simplistic. Bitcoin hasn’t become a mainstream digital currency. Instead, it has taken on a different role—less about transactions and more about being a speculative or store-of-value asset.
Had I bought Bitcoin when it dipped to €3,000, I might have made a handsome profit. But here’s the catch: profiting from flawed logic or luck isn't sustainable. Good fortune isn’t a strategy. Without understanding the foundation of an investment, future bets are doomed to fail.
Lessons in Investing
Investing based on hearsay or hype often leads to regret. A deep understanding of the underlying asset is essential. This principle applies to cryptocurrencies even more than traditional investments, as crypto projects can be harder to evaluate.
There are indeed brilliant crypto projects that are shaping the future. However, the crypto space also houses opportunists and dubious schemes. Following trends without understanding the risks can lead to catastrophic losses.
The Risks of Herd Mentality
Consider the recent saga of a meme coin tied to a viral internet sensation, the “Hawk Tuah Girl.” Within hours, it skyrocketed to a valuation of $490 million, only to crash by over 95% shortly after. Those who joined the frenzy without understanding the risks were left “holding the bag.”
This highlights a critical point: it’s not inherently wrong to invest in risky or unconventional projects. What’s dangerous is doing so blindly. Educated decisions, even in volatile markets, are the key to maintaining confidence when things go awry.
The Unique Position of Bitcoin and Ethereum
Bitcoin and Ethereum have set themselves apart from other crypto projects by achieving significant decentralization and regulatory acceptance in key markets like the U.S. This legitimacy, bolstered by the creation of ETFs, has drawn traditional investors into the fold.
But does this mean Bitcoin is immune to failure? Not quite. Its value depends heavily on demand. If a significant portion of Bitcoin ends up concentrated in the hands of a few—such as institutional investors, ETFs, or governments—it risks losing its broader appeal. Without widespread interest, even Bitcoin’s scarcity won’t sustain its value.
The American Gamble
Currently, the U.S. appears to be the most aggressive player in the Bitcoin space. If other nations perceive Bitcoin as overly dominated by American interests, they may lose enthusiasm, leading to declining demand and potentially zero value.
Final Thoughts
Bitcoin has proven its resilience, but its future remains uncertain. Its value isn’t guaranteed by algorithms or hype—it relies on collective belief and adoption. Whether it thrives or fades will depend on how evenly it remains distributed and the trust it continues to inspire globally.
As with any investment, the golden rule applies: know what you’re investing in. Blind optimism is a gamble, not a strategy.
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