To #Bitcoin investors:

Ouch. The past few years have been a wild ride in both traditional financial markets and the #Bitcoin space, particularly for Bitcoin holders. As of this moment, Bitcoin’s price has experienced significant volatility, with massive drawdowns from its all-time highs. Yet, despite the fluctuations, by many metrics, Bitcoin is stronger and more widely accepted than ever before.

● The number of unique Bitcoin addresses surged to over 140 million in 2024, from 90 million in 2020.

●Bitcoin’s market cap, while volatile, still grew to over $1 Trillion at its peak, and has maintained the trend also in 2024.

●Proportion of transactions on the Bitcoin network related to institutional investors grew from 10% in 2020 to 40% in 2024 as corporate treasuries, hedge funds, and public companies increasingly added Bitcoin to their balance sheets.

●Layer 2 solutions like the Lightning Network saw an 800% growth in usage, helping to reduce congestion and transaction fees during periods of high activity, which historically plagued the network during bull markets.

●Average daily volume for Bitcoin futures and ETFs rose by 300% as institutional interest in hedging and gaining exposure to Bitcoin without holding the asset directly increased.

●International adoption grew to record levels, with developing economies in Africa and Latin America adopting Bitcoin as a hedge against inflation and local currency instability, further legitimizing its use as a global store of value.


In the macroeconomic environment:

Central banks across the world embarked on aggressive monetary tightening, reversing ultra-loose monetary policies that fueled speculative bubbles in risky assets, including Bitcoin, post-2020. As interest rates rose, liquidity shrank, and Bitcoin entered a period of consolidation.

Inflation spikes in key economies, combined with the debasement of fiat currencies, fueled Bitcoin's parabolic run between 2020 and 2021, where its price surged over 400%. However, with inflation peaking and tightening policies setting in, Bitcoin faced headwinds from risk-off sentiments. Bitcoin's narrative as “digital gold” strengthened in response to economic uncertainties, with the U.S. dollar losing purchasing power and geopolitical tensions rising across key markets. Gold prices may have stagnated, but Bitcoin was viewed as a hedge against monetary devaluation.

Countries facing economic instability and capital controls (e.g., Argentina, Lebanon) accelerated #Bitcoin adoption to safeguard personal wealth and facilitate cross-border transactions, driving up demand for the currency.

So, if the #Bitcoin network is more robust today than it was four years ago, why the price consolidation so dramatically from its all-time highs? As the famed investor Benjamin Graham said, “In the short term, the market is a voting machine; in the long term, it’s a weighing machine.” Bitcoin’s wild price swings reflected a mixture of speculation, macroeconomic changes, and shifts in liquidity. There was a lot of "voting" going on in the 2020 boom cycle, driven by retail exuberance, loose monetary policy, and FOMO (fear of missing out). Now, Bitcoin is moving towards less speculative, more foundational adoption with long-term utility.

The fundamentals of #Bitcoin remain strong, with adoption growing, layer 2 scaling solutions improving, and macroeconomic conditions still favoring the need for sound money alternatives. We are building a future where #Bitcoin plays a critical role in financial markets, and over time, we believe this will be recognized.

In the meantime, we keep our heads down, running a more resilient, decentralized financial network.