Bitcoin: fad or the future? This question has followed the digital currency since its inception and continues to spark debate as adoption grows and volatility persists. In recent years, bitcoin’s price has surged past record levels—reaching over $3,000 from around $1,000 at the start of one calendar year—drawing both fascination and skepticism. At the same time, technical developments like blockchain forks have raised concerns about fragmentation and usability among users.
Yet, for all the noise, the core debate remains philosophical: Does bitcoin have intrinsic value? Critics like Howard Marks, co-founder of Oaktree Capital, argue it does not. In a widely circulated letter, he dismissed digital currencies as “an unfounded fad” or even a potential pyramid scheme—valuable only to the extent people are willing to pay for them. His stance reflects a broader unease about an asset unmoored from physical backing, prone to wild price swings, and still limited in real-world utility.
But here's a counterintuitive truth: neither does a $1 bill.
The Myth of Intrinsic Value
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Money, in any form, is ultimately a social agreement. A dollar bill is just cotton and linen; a gold coin is merely a dense yellow metal. Their value isn’t inherent—it’s assigned. This concept applies across all forms of currency, whether physical or digital.
Fiat currencies—like the U.S. dollar or euro—are backed not by gold or silver but by trust in institutions and governments. That trust allows us to exchange paper for groceries, rent apartments, and pay taxes. But history shows how fragile that trust can be. When governments overprint or mismanage their currencies—like Zimbabwe in the 2000s or Venezuela more recently—those same bills become worthless overnight.
Even gold, long considered the ultimate store of value, lacks true "intrinsic" worth beyond what society collectively agrees it has. Yes, it’s rare, durable, and useful in some industries—but its primary value comes from centuries of cultural and economic consensus. Bitcoin is no different in this regard: its value emerges from network adoption, scarcity (capped at 21 million coins), and belief in its long-term utility.
Bitcoin’s Real Advantage: Financial Inclusion
What sets bitcoin apart isn’t mystical value—it’s functionality. For billions living in regions with unstable banking systems or authoritarian regimes, traditional finance is inaccessible or unreliable.
Consider Argentina, where repeated currency devaluations have eroded savings. Or Nigeria, where inflation hovers near double digits and access to international payment platforms is restricted. In such environments, bitcoin offers something revolutionary: a borderless, censorship-resistant way to store and transfer value without relying on banks or central authorities.
This isn’t theoretical. Remittance workers use crypto to send money home faster and cheaper than through Western Union. Entrepreneurs in emerging markets use stablecoins (digital assets pegged to fiat) to protect their earnings from local currency collapse. These use cases highlight a powerful reality: digital currencies solve real problems where traditional systems fail.
Skepticism Is Normal—And Healthy
New forms of money have always faced resistance. In the 19th century, paper currency was distrusted because it wasn’t tied to tangible assets like land or gold. Critics saw it as flimsy, artificial—even dangerous. Sound familiar?
William Jennings Bryan’s famous “Cross of Gold” speech railed against elite financiers who favored gold-backed money over silver, which he believed better served working people. Replace “paper money” with “bitcoin,” and many of those arguments echo today’s critiques.
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Change is rarely embraced immediately. The discomfort people feel toward bitcoin stems not from its flaws alone—but from its unfamiliarity. It challenges deeply held assumptions about what money should look like, who controls it, and how it moves.
Volatility ≠ Worthlessness
Bitcoin’s price swings alarm traditional investors. One day it hits new highs; the next, it plunges 20%. But volatility is typical of emerging asset classes. Early stock markets were chaotic. The internet boom brought wild speculation before mature business models emerged.
Bitcoin is still in its adolescence. Its market cap—around $55 billion at the time of writing—is tiny compared to global equities or bonds (which total nearly $300 trillion). Ethereum, the second-largest cryptocurrency, was valued under $20 billion. These numbers reflect nascent adoption, not irrelevance.
Moreover, extreme price movements don’t negate utility. They reflect uncertainty about future demand, regulatory landscapes, and technological evolution—all normal in innovation cycles.
A Glimpse Into the Future
We don’t know if bitcoin will dominate digital finance or fade into obscurity. But we do know that financial services are overdue for transformation. ATMs automated withdrawals; algorithms transformed trading; mobile apps made banking ubiquitous. Yet much of the global financial infrastructure still runs on decades-old systems.
Blockchain technology—the foundation of bitcoin—offers a new paradigm: decentralized ledgers that enable transparent, secure, peer-to-peer transactions without intermediaries. Whether through bitcoin or its successors, this shift will redefine how we think about ownership, identity, and value transfer.
As Wences Casares, a prominent bitcoin advocate from Argentina, advises: own less than 1% of your net worth in bitcoin, don’t trade it actively, and wait at least five years before judging its success. That approach balances curiosity with caution—a wise stance in uncertain terrain.
Frequently Asked Questions
Q: If bitcoin isn’t backed by anything physical, how can it be valuable?
A: Like fiat currencies and gold, bitcoin derives value from collective belief and utility. Scarcity, security, and decentralization contribute to its perceived worth.
Q: Isn’t bitcoin mostly used for speculation?
A: Currently, yes—many buy it hoping for price appreciation. But growing use cases in remittances, cross-border payments, and financial inclusion show practical applications beyond trading.
Q: Can bitcoin replace traditional money?
A: Full replacement is unlikely soon—but it can coexist as an alternative store of value or payment rail, especially in unstable economies.
Q: What happens if governments ban bitcoin?
A: Bans may slow adoption locally, but decentralized networks are hard to fully suppress. Demand often shifts underground or to jurisdictions with supportive regulations.
Q: Is bitcoin safe to use?
A: Security depends on user practices. While exchanges have been hacked in the past, holding private keys securely (e.g., via hardware wallets) makes bitcoin highly resistant to theft.
Q: How does bitcoin help people without bank accounts?
A: Anyone with internet access can receive, store, and send bitcoin—no ID, credit check, or bank approval needed. This empowers unbanked populations globally.
The path forward for digital currencies remains uncertain. But one thing is clear: money is evolving. Whether through bitcoin or future innovations, the digital revolution will transform how we save, spend, and share value across borders.
👉 Explore the next era of finance—where trust is built on code, not institutions.