Bitcoin is back in the headlines after the world’s largest cryptocurrency tumbled sharply on Thursday, briefly slipping below $61,000. The drop marks a decline of more than 50% from its October peak, when it surged past $126,000 to a record high.

As of this writing, bitcoin has clawed back some of those losses and is trading near $66,000. But whatever its supporters or critics expect from the asset, one thing remains constant: extreme volatility is a feature that will likely endure.
 

That volatility underscores bitcoin’s biggest challenge relative to the use case laid out in the 2008 whitepaper by its still-unknown creator, Satoshi Nakamoto. The original vision imagined bitcoin as a peer‑to‑peer electronic cash system—an alternative monetary frontier enabling direct payments without banks, governments, or other intermediaries. Decentralized transactions, in theory, would free individuals from the traditional financial system.

But the monetary revolution didn’t unfold as planned. Over time, the idea of bitcoin as a medium of exchange has faded, largely because of the practical hurdles of using it for everyday purchases.

Instead, bitcoin’s appeal has shifted toward its supposed role as a store of value. Rather than buying groceries or making a down payment on a house or car, advocates now argue that holding bitcoin is prudent because it will preserve purchasing power over the long run. In this narrative, bitcoin becomes a hedge against inflation, geopolitical turmoil, and broader macroeconomic instability.

The comparison to digital gold rests on bitcoin’s limited supply: only a finite number can ever be mined. Scarcity is indeed a prerequisite for any store‑of‑value asset. But scarcity alone doesn’t guarantee that bitcoin will behave like gold in the long run. Much depends on how market sentiment evolves—and crypto crashes don’t help the case.

Whether bitcoin ultimately earns that store‑of‑value status is unknowable. Still, a growing number of investors, institutions, and even governments have added it to their balance sheets.

The problem is that it’s difficult to view bitcoin as a reliable store of value when its price can swing so violently in short periods. Gold has its own volatility, but it benefits from centuries of history as a monetary asset. Its long‑term record of preserving value relative to paper currencies is well‑documented. Projecting that legacy onto an asset not yet two decades old is still a leap.

As a speculative asset, however, bitcoin excels. The question is whether speculation alone can sustain it?

A popular 2023 book captured the quasi‑religious fervor that often surrounds bitcoin. “For Bitcoin believers, the rising price became its own justification,” observes Zeke Faux in Number Go Up: Inside Crypto’s Wild Ride and Staggering Fall. At a Miami conference, speakers leaned on circular logic: bitcoin will rise because it has risen. The mantra—“number go up”—became both rallying cry and worldview.

Bitcoin may one day become a respected store of value and/or a widely used medium of exchange. It may also end up as a historical footnote—a bold but failed experiment in digital finance. Even if you believe some version of the crypto future is inevitable, bitcoin faces no shortage of rivals vying for the same crown. The road ahead remains uncertain and treacherous for Nakamoto’s creation.

For now, the only certainty is that the volatility isn’t going anywhere.

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