Once seen as eccentrics, bitcoin enthusiasts are now being validated by the cryptocurrency's remarkable performance. While many investors and economists initially dismissed it as a passing fad or a hoax, bitcoin is now a clear standout, defying predictions of a collapse similar to that of 2022.
In 2021, bitcoin shared the status of a speculative asset with unprofitable technology stocks and memes. Today, while the latter have lost half their value on average, bitcoin is reaching new heights, a rare resilience that suggests a sustainable phenomenon. This rise contrasts with the current bull market, dominated by technology giants, and shows that bitcoin is not benefiting from the artificial intelligence craze.
Bitcoin has demonstrated its potential as a long-term investment, outperforming almost all the other cryptocurrencies in the top 10, with the exception of Solana. Its market capitalisation now exceeds $1.3 billion, putting it well ahead of its rivals.
Sceptics used to question bitcoin's reliability because of its volatility. However, this volatility has fallen considerably. Bitcoin is still more volatile than the dollar and gold, but this reduction in volatility reinforces its status as a potential currency and investment.
Despite these successes, bitcoin has yet to realise the vision of becoming the new "digital gold" or a widespread medium of exchange. The adoption of cryptocurrencies has declined overall, with stablecoins being preferred for commercial transactions.
Bitcoin's supporters are seeing their predictions confirmed by the inherent limits on the supply of bitcoins, which are underpinning its price. The next halving in April is a key factor in the current rise.
Major institutions now see bitcoin as a legitimate investment, with a significant increase in their holdings. The SEC's approval of new bitcoin ETFs shows that this market is set for explosive growth.
Bitcoin is establishing itself as a future-proof asset and shows that early adopters had good reason to celebrate. In the current market climate, the saying "only fools dance, but the biggest fools watch" has a particular resonance.
