Bitcoin is a Shadow of Its Former Self

It was October 2008 — and the world was furious with the banking sector.

A huge financial crisis had led to a devastating recession, Lehman Brothers going bankrupt, and some firms receiving billions in government aid.

That month, a whitepaper emerged for a cryptocurrency called Bitcoin, which vowed to deliver peer-to-peer transactions and cut out middlemen.

Make no mistake: Satoshi Nakamoto was partly motivated by the chaos that had unfolded on Wall Street.

Bitcoin’s genesis block in January 2009 carried a headline from The Times of London: “Chancellor on brink of second bailout for banks.” 

Worth cents on the dollar, this was a cryptocurrency with a rebellious streak — and determined to offer an alternative to the status quo. 

Small numbers of Bitcoiners gathered at modest conferences, a mix of uber-smart developers and mavericks distrustful of big finance.

Price was of secondary concern. The priority was creating a digital asset with a fixed supply that couldn’t be debased through quantitative easing.

But 16 years on from launch, an uncomfortable truth has emerged: Bitcoiners have lost sight of why this cryptocurrency was created.

Institutional investors are buying up coins faster than they can be mined, with 5.7% of BTC’s market cap now tied up in exchange-traded funds.

Governments are now looking into creating strategic Bitcoin reserves — spurred on by Donald Trump’s pro-crypto policies.

Publicly listed companies like MicroStrategy are aggressively adding BTC to their balance sheets too, with the likes of Amazon, Microsoft, Meta and Apple urged to do the same.

All of this means that a substantial amount of Bitcoin’s circulating supply is now in the hands of a few entities — pushing what was a decentralized cryptocurrency into a much more centralized future.

Many in the industry are rubbing their hands with glee, and fixated on BTC vaulting beyond $100,000, with some setting a $1 million price target.

But make no mistake: all of this comes at a huge cost.

Led by the likes of BlackRock and Fidelity Investments, Bitcoin’s success is now judged on whether it’s being embraced by financial institutions — the very same organizations Satoshi Nakamoto railed against.

A distrust of government has been replaced with lobbyists practically begging the U.S. to buy up to 1 million BTC in the next five years.

Focus has turned to making the rich richer, rather than reflecting on how BTC could benefit low-income families struggling with high remittance fees or rampant hyperinflation in their fiat currencies.

A lot of this is driven by greed. You could argue that those who had the foresight to buy Bitcoin a decade ago, and hold on to it since, are now too rich to care about this cryptocurrency’s future.

While they may feel vindicated in their belief that BTC would one day change the world, they’ve lost sight about why this mattered.

Bitcoin is now stronger than ever from a price standpoint — and its influence will only grow in the years to come.

Yet at the same time, this cryptocurrency is a shadow of its former self. You have to wonder how Satoshi Nakamoto would feel about that.