I originally wrote this article on 21st Feb 2025 when Bitcoin price hovered at $99,118.00, since then Bitcoin has retraced to $79,501, a drop of approximately 25% from it’s all time high of $108,786.
Let’s delve into Bitcoin’s rise and fall. From the depths of the 2008 financial crisis, a revolutionary idea emerged. A mysterious figure, known only as Satoshi Nakamoto, introduced Bitcoin to the world. It promised a decentralized future, free from the control of governments and institutions. Deep within its code, Satoshi Nakamoto embedded a message- "Chancellor on brink of second bailout for banks.” This act was a profound statement, revealing the core of Satoshi's vision. Bitcoin wasn't just about creating a new currency; it was about challenging the existing financial system. At the heart of Satoshi's vision lay the concept of decentralization.
Bitcoin, unlike traditional currencies, wouldn't be controlled by any single entity. t would be governed by a distributed network of computers, all following a pre-determined set of rules. By design, there would only ever be 21 million Bitcoins. In those days, personal computers were not as powerful nor were there dedicated graphics processing unit (GPU). The elegance of the white paper and the fact that it could be mined by PCs of the time and it’s built-in scarcity, Bitcoin was embraced by a small but passionate community of early adopters, developers, and idealists.
Designed as “peer-to-peer cash,” its 7-transaction-per-second cap and fees averaging $5 (peaking at $37 in 2023) render it impractical for mass use. Outdated 1MB blocks, a relic of 2009’s tech landscape, prioritize fee competition over affordability. Contrast this with Visa’s 24,000 TPS or Solana’s 65,000. While networks like email scaled efficiently, Bitcoin’s fees climb with demand. The Lightning Network, a proposed fix, remains underutilized, with just 5,000 BTC locked in (per DeFi Llama)—a Band-Aid on aging tech.
Bitcoin’s proof-of-work mechanism devours 150–200 TWh annually—exceeding Ukraine’s total usage—to process 300,000 daily transactions. Ethereum’s 2022 shift to proof-of-stake cut energy use by 99%, while central bank digital currencies (CBDCs), like China’s digital yuan (testing 180 million TPS), offer efficiency Bitcoin can’t match.
Bitcoin thrives in geopolitical strife, enabling circumvention of sanctions—$24.2 billion in illicit crypto flowed through it in 2023 (Chainalysis). Bitcoin’s prominence aligns with systemic cracks in global finance. By 2024, U.S. national debt ballooned to $35 trillion, with annual interest exceeding $1 trillion—surpassing defense spending. The dollar’s dominance waned as BRICS nations (representing 37% of global GDP) accelerated de-dollarization efforts. Sanctioned countries, like Russia and Iran, have increasingly turned to crypto, transferring $15.8 billion in 2024 (per Chainalysis), leveraging Bitcoin’s resistance to censorship and seizure.
In a bold move, El Salvador became the first country to adopt Bitcoin as legal tender in 2021. This decision, spearheaded by President Nayib Bukele, was a bet on the future of finance. While critics questioned the risks, El Salvador's government argued that Bitcoin could help bank the unbanked and attract foreign investment. On 29th Jan 2025, El Salvador’s lawmakers voted to remove Bitcoin as legal tender as part of its deal with the International Monetary Fund (IMF) will prove ominous.
Bitcoin persists as a hedge against chaos, buoyed by ETF inflows and speculative zeal. Yet its technological stagnation—crippled scalability, unsustainable energy use, and quantum vulnerability—casts doubt. Gold’s tangible security and CBDCs’ efficiency overshadow its promise. El Salvador’s experiment underscores its failure as a currency; its “store of value” claim relies more on narrative than utility.
Founded in 1989, MicroStrategy was once at the forefront of business intelligence and analytics software. For years, the company thrived, helping enterprises extract insights from data. However, as tech giants like Microsoft monopolized the space, MicroStrategy’s position weakened. Competing against such titans proved daunting, and by the late 2010s, its market share and growth were stagnating.
In August 2020, Saylor realized his company’s poor prospects and started using the company’s cash reserve to buy Bitcoin. He also began issuing convertible bonds—bonds that can be converted to a pre-determined number of shares at a set price at a later time—to raise cash to buy Bitcoin.
Saylor argues this valuation is justified by offering investors leveraged exposure to Bitcoin. “We sell you this equity that is 2x Bitcoin and we get you 2x by selling bonds that strip the risk off the bottom of the capital structure,” he said on the Scott Galloway podcast.
MicroStrategy, led by Michael Saylor, has continued its Bitcoin acquisition strategy, purchasing 21,550 BTC for $2.1 billion between Dec. 2 and 8, 2024. The company now holds 499,096 bitcoins as of Feb. 24, 2025. MicroStrategy states the average purchase price as $62,473.01 USD per bitcoin with a total cost of $27.954 billion USD. Since then, the value of it’s Bitcoin holdings has depcreciated from an all-time high of almost $54 billion to $39 billion as of today.
As of Dec. 22, 2024, 19.9 million bitcoins have been mined, leaving about 1.1 million bitcoins to release. The total bitcoin supply is capped at 21 million. What Happens After All 21 Million Bitcoin Are Mined? After the maximum number of bitcoins is reached, even if that number is ultimately slightly below 21 million, no new bitcoins will be issued. Will Bitcoin function like pocket change or bars of gold in 2140? The Bitcoin ecosystem is still developing, making it possible that Bitcoin itself will continue to evolve over the coming decades. However Bitcoin evolves, no new bitcoins will be released after the limit of 21 million coins is reached. This supply limit is likely to have the most significant impact on Bitcoin miners, but it's possible that Bitcoin investors could also experience adverse effects.
Are you bullish on Bitcoin and it’s rise in prominence?
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