Author: Teresa Xie, Bloomberg Reporter
Compiled by: Jiahuan, ChainCatcher
Bitcoin is entering "adulthood." At least in terms of age, that is indeed the case.
Eighteen years ago, the pseudonymous Satoshi Nakamoto published a white paper envisioning a decentralized electronic payment system. This earliest cryptocurrency was designed to allow people to transfer money directly to each other without relying on banks or any central authority.
Now, as Bitcoin celebrates its 18th birthday this Saturday, it is time to look back at how far it has come from the rebellious experiment Satoshi Nakamoto originally envisioned. This journey is one many are already familiar with: some people got rich from it, some relationships fell apart because of it; ecosystems rose around it, and ecosystems eventually collapsed. Governments have bought it, celebrities have called it "rat poison," and legions of people have spent years arguing over what it actually is.
Along the way, Bitcoin has been declared dead and has come back to life again and again; it was once rejected by the masses, yet later gained all kinds of supporters, with even Wall Street joining in.
This also raises a key question: nearly 20 years after its debut, has Bitcoin truly matured, or is it just pretending to be mature?
Wall Street Has Become a Bitcoin Supporter
"It has indeed come a very long way," said Anastasia Melachrinos, head of growth at Kaiko. "Think about where Bitcoin first appeared—the dark web and forums. And in 18 years, we have gone from there to an entirely new asset class."
Bitcoin has made some unexpected friends and gained social recognition, especially in recent years. Today, investors can invest in Bitcoin in many ways, including through products offered by Wall Street giants such as BlackRock. BlackRock manages a $66 billion Bitcoin ETF (exchange-traded fund). Dozens of public companies have already held Bitcoin on their balance sheets, and some of the world's wealthiest investors still speak highly of it.
The irony is not hard to see. Bitcoin was originally born to challenge centralized finance, yet today the very institutions it once sought to disrupt have become some of the blockchain's strongest supporters. Wall Street is accelerating its push into stablecoins, asset tokenization, and blockchain-based financial infrastructure, increasingly incorporating this technology into the financial system that Bitcoin originally sought to bypass. There are many more such examples, but almost none of them still evoke a rebellion against the traditional financial order.
"The most fundamental significance of Bitcoin is that it proved value can be transferred without intermediaries," said Linda Jeng, chief legal and policy officer at Aave Labs. "Since then, Bitcoin has driven several rounds of development in digital finance. What was once marginal technology is becoming the new financial system."
Volatility Has Fallen, but Its Moves Still Closely Track US Stocks
Now let's look at stability. In this respect, Bitcoin has indeed made some progress. The growing popularity of ETFs has made investing in Bitcoin more convenient, which has partly caused its once-extreme price swings to narrow noticeably. Earlier this month, its 30-day volatility fell to the lowest level in three years.
Caption: Bitcoin volatility has declined, with its 30-day volatility falling earlier this month to the lowest level in three years. Source: Bloomberg.
This does not mean that Bitcoin has completely shed its immature side; it still experiences dramatic swings. Last October, a sudden sell-off led to a record $19 billion in leveraged positions being liquidated in a single day, and this is far from the first time the crypto industry has experienced boom-and-bust cycles. There was also the crypto winter of 2022, when the crypto exchange FTX, founded by Sam Bankman-Fried, collapsed in November of that year, and more than $2 trillion in crypto asset market value subsequently evaporated.
Moreover, Bitcoin's movements still track U.S. stocks. For example, it is highly correlated with the Nasdaq 100 index, indicating a lack of independence in its price movements.
On Its 18th Birthday, the Market Lacks a Celebratory Mood
As Bitcoin gradually matures, it has also lost some of its edge. It is no longer the rebel challenging tradition in financial markets, nor the bold bet in the eyes of risk-takers, but an asset that ordinary investors will also include in a balanced portfolio. Just last week, venture capital giant Andreessen Horowitz officially changed the name of its crypto fund from a16z Crypto to a16z Frontier.
On the eve of Bitcoin's birthday, there was not much celebratory atmosphere in the market.
Based on current trends, this month could become Bitcoin's worst-performing month since June. The upward momentum accumulated over the summer has failed to continue, and the price is now hovering around $80,000. Supporters believe Bitcoin will soon return to $100,000, or even eventually reach $1 million; critics believe it is worthless.
Anthony Scaramucci, founder of SkyBridge Capital, first bought Bitcoin years ago at $6,000 and later bought at $16,000. He said he has always viewed this investment as a bet on the next five years. He predicts that Bitcoin will double over the next five years, which by his calculation equates to a compound annual return of about 15%.
"Bitcoin is the benchmark of this industry," he said in an interview. "It will still be around long after you and I are gone."
