Bitcoin's ascent from being virtually worthless to a significant global asset class is one of the most compelling financial narratives of our time. Understanding the forces behind its price appreciation requires more than just observing market charts—it involves a deeper grasp of monetary history, economics, and technology. The book The Bitcoin Standard by Dr. Saifedean Ammous offers a foundational framework for analyzing Bitcoin’s rise. This article explores core insights from the book to help explain why Bitcoin's value continues to climb.
What Is The Bitcoin Standard?
The Bitcoin Standard is a comprehensive analysis of the history and nature of money. Authored by economist Dr. Saifedean Ammous, the book examines how societies have used various forms of money—from seashells and precious metals to government-issued currencies—and makes a case for Bitcoin as a modern form of sound money. It emphasizes the importance of monetary hardness, scarcity, and decentralization in sustaining economic growth and preserving value over time.
7 Key Reasons Why Bitcoin’s Price Is Rising
1. A Superior Form of Money
Human societies have always sought reliable mediums of exchange. Bitcoin represents a technological solution to age-old monetary problems: it offers users full control over their assets and the potential for long-term value preservation. Unlike traditional financial systems, which rely on intermediaries, Bitcoin operates on a decentralized network, making it resistant to censorship and centralized failure.
2. The Hardest Money Ever Created
Monetary “hardness” refers to a money’s resistance to devaluation—often through inflation or increased supply. Gold was historically considered hard money due to its limited supply, but even gold’s supply increases slightly each year. Bitcoin, by contrast, has a fixed supply of 21 million coins. This absolute scarcity makes it the hardest form of money ever invented, attracting those seeking a durable store of value.
3. A Hedge Against Hyperinflation
Hyperinflation occurs when a currency loses its value rapidly, often due to excessive money printing by central authorities. The Bitcoin Standard argues that economies operating under a gold standard rarely experienced hyperinflation. In today’s world, where many countries operate on fiat systems, investors are turning to Bitcoin as a safeguard against currency devaluation and economic instability.
4. Enhancing Economic Freedom
Bitcoin provides financial sovereignty to individuals, especially those in regions with unstable economies or restrictive governments. In countries with weak rule of law or capital controls, Bitcoin offers a way to opt out of failing local currencies and protect personal wealth. This utility has driven rapid adoption in nations experiencing economic turmoil.
5. Improving Remittance Payments
Sending money across borders has traditionally been slow and expensive. Bitcoin, particularly through layer-2 solutions like the Lightning Network, enables fast and low-cost international transactions. This functionality makes it an attractive tool for migrant workers and businesses that rely on cross-border payments.
6. A Neutral Global Money
National currencies often come with geopolitical baggage. The U.S. dollar’s role as the world’s primary reserve currency grants the United States certain economic advantages. Bitcoin, as a neutral and decentralized asset, offers a level playing field for all nations. This has led some countries to explore adopting Bitcoin as legal tender or a reserve asset.
7. Response to Money Printing
Central banks worldwide have engaged in aggressive money creation, especially in response to economic crises. This expansion of the money supply devalues existing currency units and drives investors toward scarce assets like Bitcoin. When fiat currencies lose purchasing power, Bitcoin’s fixed supply becomes increasingly appealing.
Will Bitcoin’s Price Continue to Rise?
Bitcoin’s price growth has been exceptional, but it is unlikely to continue at the same exponential rate indefinitely. As the network matures, its price behavior may shift from that of a high-growth startup to a more stable monetary asset. However, since Bitcoin’s market capitalization is still much smaller than that of gold or global fiat systems, many believe there is significant room for future appreciation.
Widespread adoption and integration into financial infrastructure could further stabilize Bitcoin while gradually increasing its value. It may eventually evolve into a practical, everyday monetary tool rather than purely a speculative investment.
Frequently Asked Questions
What makes Bitcoin a “hard” money?
Bitcoin is considered hard money because its supply is fixed and immutable. Only 21 million bitcoins will ever exist, making it immune to inflationary policies that affect fiat currencies.
How does Bitcoin protect against hyperinflation?
Hyperinflation erodes the value of traditional currencies. Bitcoin’s scarcity and decentralized nature make it a viable alternative for preserving wealth when local economies falter.
Can Bitcoin really be used for everyday transactions?
Yes, with technologies like the Lightning Network, Bitcoin transactions can be fast and low-cost, making them suitable for daily use. Adoption is growing among merchants and payment processors.
Is Bitcoin adoption increasing globally?
Absolutely. Both individual and institutional adoption are rising. Countries are exploring regulatory frameworks, and corporations are adding Bitcoin to their balance sheets.
What role does The Bitcoin Standard play in understanding Bitcoin?
The book provides a historical and economic context for Bitcoin’s emergence, framing it as the latest evolution in the long history of money. It helps readers understand Bitcoin’s value proposition beyond short-term price movements.
How can I learn more about using Bitcoin?
👉 Explore practical Bitcoin guides for detailed information on acquiring, storing, and transacting with Bitcoin.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Always conduct your own research and consult a licensed financial advisor before making investment decisions.