Key Takeaways
- Bitcoin is no longer considered the “terrible store of value” banking executives once called it.
- Bitcoin adoption is likely to grow over the next few years as the digital asset becomes even more popular.
- While it’s impossible here to accurately predict what will happen to Bitcoin in the next few years, many developments have benefited it.
Since its inception in 2019, headlines about Bitcoin going into the mainstream have appeared in numerous financial outlets but most people have yet to take them seriously. It wasn’t until 2024 that governments, politicians, Wall Street giants and retail investors stopped ignoring the importance of digital assets. This article explores the reasons why Bitcoin adoption is booming and why the cryptocurrency’s golden era could have just begun.
From “Bitcoin-Phobia” to “Bitcoin-Philia”
No one would have believed a few short years (months) ago that Bitcoin would trade at above $100,000, but it happened in December 2024 for the first time. While the ongoing adoption of Bitcoin is getting harder to ignore, no one is calling it “the internet money favored by tech enthusiasts anymore.” There’s serious talk surrounding this growing financial asset that national banks, central banks, and corporations are paying serious attention to. For example, El Salvador, the first country to adopt BTC as legal tender in 2021, garnered over $333 million in Bitcoin profits in 2024. In the United States, everyone is discussing President-elect Donald Trump’s proposal to establish the country’s strategic Bitcoin reserve.
The rapid evolution of digital payments technology has forced traditional financial systems to reconsider their take on crypto as banks begin to feel their power wane and they seek to regain control. For reference, in 2014, regulators in New York started exploring ways they could control Bitcoin; at the time, executives from Wall Street’s biggest banks feared regulation would legitimize BTC and threaten the financial industry.
The CEO of America’s biggest bank, JM Morgan, referred to Bitcoin as a terrible store of value that was being used for illicit purposes. However, their efforts have failed because everyone agrees BTC is the money of the future. The banking industry is now racing to catch up by experimenting with crypto and seeing how it could work in their favor. The banking industry is right now complaining that regulators should have acted quickly to enact crypto regulation.
It is now clear that nation-states are opting into the Bitcoin adoption bandwagon for the same reasons that individuals and corporations are doing. Others are mining Bitcoin, while others are afraid of being locked out of the emerging financial system. To this date, the USA, the UK, and China are holding on to large stockpiles of Bitcoin they confiscated from criminal elements, with clear plans to purchase more to build strategic reserves.
Bitcoin’s Stealth March into the Mainstream
The value of cryptocurrencies like Bitcoin, which was once dismissed as assets of fringe interest by tech evangelists, has skyrocketed in recent years to reach $103,000 in December 2024. In September 2021, Bitcoin adoption got into a roll when El Salvador declared it to be legal tender alongside the U.S. dollar. Soon after that, there was talk of making BTC a medium of exchange in Afghanistan to enable financial transactions since the issuance of fiat currency had broken down.
The recent introduction of Spot Bitcoin Exchange Traded Funds (ETFs) has also bolstered Bitcoin’s stealth march into mainstream finance on the New York Stock Exchange. This has allowed U.S.-based investors to speculate on Bitcoin prices without owning them and mint fortunes in the process. The promised crypto-revolution spawned by the transformative potential of blockchain technology could benefit governments and their citizens while playing an active role in managing technological, financial, and social risks.
Bitcoin Adoption Set to Grow as Supply Shortage Approaches
Bitcoin’s price fell slightly in mid-2024 from March 2024, then an all-time high of $73,000, and it went on to break several price records in December. Still, some experts say that BTC’s Bull Run isn’t over. Indicators show that Bitcoin adoption is growing as BTC enters consolidation mode. Bitcoin has gathered steam and achieved a six-figure price, and analysts believe the price could double in the future. Right now, less than 10% of bitcoins are left to be mined, but there’s growing mainstream adoption and awareness. Bitcoin’s fixed supply will lead to diminished volatility and, ultimately, a steady price increase.
Political Winds Shifting in BTC’s Favor
Besides Wall Street and banking institutions warming to it, Bitcoin adoption is also being propelled by the favorable political climate surrounding cryptocurrencies. U.S.U.S’s President-elect Donald Trump, himself a former cryptocurrency critic, has since shifted to becoming a crypto-centric politician. Besides their being a U.S. Congress that has a majority of pro-crypto politicians, Trump nominated crypto-friendly lawyer Paul Atkins to replace Gary Gensler at the helm of the US Securities and Exchange Commission (SEC).
During his tenure as an SEC commissioner between 2002 and 2008, Atkins fought hard to create crypto-friendly policies. His return at the helm of SEC is likely to pave the way for better regulatory clarity and attract more institutional capital into the crypto space. Trump also nominated venture capitalist David Sacks as the administration’s “AI and crypto czar.” Sacks is another strong crypto and AI advocate who could help propel Bitcoin adoption even further.
A Sound, Predictable, and Unchangeable Monetary Policy
It’s been over 15 years since the first Bitcoin was mined. Data from Blockchain.com indicates that as of Monday, December 13, 2021, 90% of all bitcoins had been mined. The miner of block #714,032 at 23:26 UTC was awarded 6.25 BTC, increasing the circulating supply of Bitcoin to 18.9 million. Consequently, only 10% of the total supply of 21 million bitcoins remained to be mined.
According to experts, the process of mining the final 10% bitcoins could go on until at least February 2140, according to the Bitcoin network’s halving schedules. Bitcoin Halving is a scheduled inflationary control procedure that cuts the reward for mining BTC in half about every four years. As a peer-to-peer (P2P) digital currency, Bitcoin runs on a sound, predictable, and unchangeable monetary policy. Unlike Fiat currency, no group of select people can decide to alter its supply. Bitcoin runs on a network of “rules without rulers,” meaning no one has the power to inflate or reduce its supply. Bitcoin may also never meet its 21 million supply limit due to several factors. Also, Bitcoin inventor Satoshi Nakamoto placed a caveat stipulating that no one could spend 50 BTC in the Genesis block. Also, another 3.7 million BTC is lost and inaccessible.
Institutions and Governments Are Likely to Trigger the Next FOMO
Today, still only a tiny percentage of people in society completely understand Bitcoin. There’s ignorance of how Bitcoin works and its full potential. Yet, the considerable number of emerging use cases for BTC is starting to show its value to a broader audience. Bitcoin has empowered regular citizens in countries like Palestine and Cuba. War and totalitarianism have eroded the value of their local currencies. Bitcoin is also acting as a store of value in select countries such as Venezuela and Turkey. This is a result of high inflation that has been eroding citizen’s purchasing power.
According to a recent Intelligence report by Bloomberg, a price correction has made Bitcoin a stronger asset. Mainstream Bitcoin adoption and the development of new exchange-traded funds (ETFs) have increased demand. Similarly, Bitcoin’s adoption as a legal tender in El Salvador is also an important factor. A new Fear of Missing out (FOMO) could ensue once the scarcity bug bites governments, institutions, and high-net-worth individuals.
Conclusion
As a new administration takes office in January 2025, the U.S. is mulling on greater, clearer, and friendlier regulation as the country appears primed to embrace cryptocurrencies. Enhanced Bitcoin adoption in the corporate world has played a pivotal role in the recent price surge for the flagship cryptocurrency. The introduction of regulatory clarity will definitely benefit the course of BTC and create even greater interest and understanding and a higher demand for digital assets.
From attempts to ban or limit the use of Bitcoin and other cryptocurrencies, governments, regulators, central banks, and financial firms are rethinking their positions on the once-ridiculed and despised digital assets. In their brief existence, cryptocurrencies have grown from a digital novelty into a $3.8 trillion market that has created a new cadre of investors, millionaires, and billionaires. It’s no wonder that many more individuals and institutions are lining up to take advantage of Bitcoin adoption and the anticipated crypto boom.
