Reports of cryptocurrency’s death have been exaggerated. For those who’ve followed bitcoin since the beginning, the fall from $64,000 to $20,000 is simply another of bitcoin’s “many deaths” (one website has tracked 455 obituaries). Those who bought at the top are asking why bitcoin is only $20,000. This question would have been unfathomable a few years ago. We should ask the opposite question: Why is this internet-created money, started by an unknown programmer on an obscure web forum, trading so high?
With millions of dollars in speculation in nonfungible tokens, initial coin offerings and obvious get-rich-quick schemes, it’s easy to forget that bitcoin wasn’t created by people looking to get rich. It was designed by a pseudonymous programmer known as Satoshi Nakamoto, who wanted a money not controlled by government-run central banks. Like gold, the bitcoin network is outside the control of any political entity. There is a predictable rate of money creation, and the number of bitcoins in existence will never exceed 21 million.