The market change you can’t ignore

Bitcoin, blockchain and cryptocurrency were all hot topics a few years ago. But technology waits for no man, and with all the hype around AI, you might think it has been forgotten. This is not the case.

In fact, those who have been following the news will have noticed a surge in interest in decentralized digital currency and the revolutionary distributed ledger technology on which it is based.

So why is this? How will this impact the value of bitcoins – one of the most successful investments in living memory? And what is the current state of the technology that many have predicted will be “the future of money”?

Let’s take a look at what’s happening in the world of bitcoin, blockchain and cryptocurrency as we approach 2025.

So remind me – What is Bitcoin again?

Bitcoin is the first and most well-known cryptocurrency, a type of digital currency. Cryptocurrencies (or “crypto”) differ from older digital currencies in two main ways. First, they are decentralized, meaning that the database that records balances and transactions (called a blockchain) is shared among hundreds of thousands of computers. These computers must achieve “consensus,” so that no one person or organization controls the network. Second, transactions are secured by encryption, allowing only those with the appropriate keys to access and spend funds in their private wallets.

Some believe that bitcoin or other cryptocurrencies could become the basis of future financial systems. This is because they can manage transactions without intermediaries or central banks, thus avoiding problems such as inflation caused by manipulation of monetary value. However, critics say crypto does not solve these problems and introduces others, including high environmental costs and regulatory challenges, which attract money launderers, criminals and scammers.

However, bitcoin is probably best known for its explosive growth in value. In 2010, 10,000 bitcoins were used to buy two pizzas. Today, one bitcoin is worth almost $100,000, an increase of almost 5 billion percent. In comparison, gold rose by just over 100% during the same period, while the value of the US dollar fell by around 45% due to inflation.

The Trump train

Whether you view him as a controversial or transformative figure, Trump’s influence on financial markets as the 45th and 47th president is undeniable. Trump’s ringing endorsement of bitcoin – a markedly different attitude from previous incumbents – is credited with accelerating the current surge in interest in the cryptocurrency.

Since announcing his belief that the United States should stock the digital currency at a convention in the summer of 2024, the price of bitcoin has skyrocketed and widespread interest in its use as an investment vehicle is out of range.

Bitcoin fans say Trump’s interest will push other countries to integrate cryptocurrencies into their own economic strategies. This will accelerate its adoption into the global financial system, further increasing its value and leading to further innovation and disruption.

So, what are Altcoins?

Altcoin is a name used to describe cryptocurrencies other than bitcoin, so it refers to alternative coins. Currently, the market capitalization of all cryptocurrencies stands at around $3.5 trillion, which is slightly more than the UK’s GDP ($3.4 trillion).

The most well-known altcoin and second-largest cryptocurrency is Ethereum, which is blockchain-based like bitcoin but includes additional features. This includes the ability to run computer code on the blockchain, enabling smart contracts. This would allow a blockchain to be programmed to automatically make a payment when predetermined conditions are met, such as the completion of a job.

Another category of altcoin is meme coins. These are cryptocurrencies based on Internet memes, the most famous being Dogecoin, based on a popular image of a dog, frequently shared on social networks and Internet forums. Sounds like a joke, right? Except the market cap of meme coins stands at $120 billion at the time of writing, and Elon Musk is apparently considering naming a new US government project after Doge.

The future of money?

So what does the future hold for bitcoin and cryptocurrency – once seemingly almost forgotten as the AI ​​craze took hold, but now firmly back on the agenda?

The surge in interest – not to mention monetary value – suggests that the technology is resilient and unlikely to fade into obscurity, as was predicted during its crisis.

But will it become the backbone of a new, fairer and more efficient financial infrastructure, as fans believe? Or will it always be a speculative bubble facilitating gambling, get-rich-quick schemes and scams?

Well, a lot could depend on the success of the economic shake-up planned by the new US president. This is a question on which economic analysts are currently divided.

With growing adoption and high levels of FOMO due to its skyrocketing price, its status as a store of value and hedge against inflation – which has led it to sometimes be considered “digital gold” – plays into his favor. The continued evolution of more innovative features and functionality, such as Ethereum smart contracts, will likely add to this.

On the other hand, there clearly remain regulatory challenges, such as the high level of volatility that leads to regular falls in values ​​and high levels of energy consumption.

But all this ultimately doesn’t matter much. Bitcoin has already forced us to rethink how we treat money and value, demonstrating that it may be possible to build a more efficient and democratic financial system based on technology and mathematics rather than central banks .

And as with other transformative technologies – AI and the Internet are two examples – once Pandora’s Box is opened, it is very difficult to stop it from changing the world.