Is Bitcoin dead?

Every few years, the same question plagues the crypto industry: Is Bitcoin dead? Sceptics use dwindling hype, regulatory concerns and huge price falls as evidence to prove that the first cryptocurrency has reached the end of its life. However, bitcoin has a history of bouncing back every time, proving critics wrong. 

In this article, we will explain what bitcoin is, define what we actually mean by ‘dead’ in the cryptocurrency environment, and explore the current performance of bitcoin against opinions from critics and supporters to present an answer to the question ‘is bitcoin dead?’. Let’s dive into the debate to uncover the truth.

What is bitcoin?

Bitcoin is a type of decentralised digital currency that operates on a peer-to-peer network, enabling secure and trustless transactions without the need for a central government or bank. It is built on blockchain technology, a distributed ledger that records all transactions in cryptographically secured blocks, linked together in a chronological chain. 

Transactions are validated through a consensus mechanism called proof-of-work (PoW), where miners solve complex cryptographic puzzles to add new blocks to the chain.

What does ‘dead’ mean in cryptocurrency?

In cryptocurrency, the term ‘dead’ is used to describe a digital asset that has either lost its value, use, or support. However, the definition can vary depending on the context. Let’s explore some common interpretations of what it means for a cryptocurrency to be ‘dead’:

• Value decline: A cryptocurrency is considered dead if its market price has dropped significantly (to almost zero) and doesn’t show any signs of recovery.
• Abandoned development: If the development team stops working on updates and improvements, the cryptocurrency is often considered to be dead.
• Lack of use: A coin can be considered dead if it’s no longer used for transactions or has been replaced by more advanced technologies.
• Regulatory concerns: If regulations make a cryptocurrency illegal or impractical to use, this usually leads to a drop in trading and use. When this happens, many critics believe the asset to be dead.
• Network failure: Technical issues, such as a 51% attack or a lack of miners to maintain the network, can leave a cryptocurrency non-functional.

In terms of bitcoin, ‘dead’ often refers to price crashes or negative press, but its widespread use and resilient network continue to challenge these claims.

The bullish perspective

Bitcoin’s supporters are passionately challenging claims that bitcoin is dead, arguing instead that over the last few years it has solidified its role as ‘digital gold’. Bitcoins capped supply of 21 million coins mirrors the scarcity and limited availability of precious metals like gold, giving it appeal as a hedge in uncertain economic climates. 

Beyond its status as a digital asset, Bitcoin is becoming increasingly integrated into decentralised finance (DeFi), where it can be used as a guarantee for loans or other financial transactions within DeFi platforms, or to provide liquidity to DeFi pools, earning rewards in return.

On top of this, bitcoin is also becoming a useful tool for sending money across borders. When compared to traditional banks or money transfer services, bitcoin allows faster transactions with lower fees, making it useful for those who live in countries with limited access to banking.

Adoption trends further fuel optimism. For example, El Salvador has adopted Bitcoin as legal tender, demonstrating its potential for mainstream use. Additionally, bitcoin’s recent integration into US politics through growing political donations; rival proposals for its role in the financial system; Trump headlining a BTC conference, and initiatives such as a proposed Bitcoin Strategic Reserve and the rise of crypto political betting platforms like Polymarket all show bitcoin’s ability to remain relevant and prove that it doesn’t seem to be heading anywhere anytime soon.

The bearish viewpoint

However, critics of bitcoin argue vehemently to the contrary, suggesting that Bitcoin faces significant challenges that could prevent its long-term survival. One of the primary concerns is its high energy consumption, with bitcoin estimated to use 127 terawatt-hours a year, contributing to environmental issues. 

As well as the sustainability concerns, heightened government regulations and competition from more advanced blockchain technologies, such as Solana, pose a huge threat to Bitcoin’s authority. 

Finally, leaders of major financial institutions are extremely vocal with their criticisms, such as CEO of JP Morgan, Jamie Dimon, who slammed bitcoin as ‘worthless and a tool for criminals’. This public disapproval has led to widespread doubts about bitcoin’s ability to maintain value and scepticism about its long-term success.

Where is bitcoin at currently?

Currently though, bitcoin is proving the sceptics wrong. As of 11am on Monday 16th December 2024, the price of bitcoin has increased by 7.29% in the last 7 days and by 153.22% in the last year! This upward momentum follows a period of volatility earlier in 2024, probably due to the increased usage and political engagement we discussed earlier. 

Bitcoin’s price has recently just surpassed $100,000, and is currently at over $104,000. It is also ranking top of the Cryptocurrency rankings, in front of Ethereum at #2 and Tether at #3. This success is driven by increasing interest, particularly after the U.S. presidential results and the bitcoin halving 2024 event that occurred in April this year. On top of this, since President-elect Donald Trump suggested he plans to create a U.S. bitcoin strategic reserve, Bitcoin’s price has surged even more, even reaching $106,000 earlier on 16th December!

What was the bitcoin halving 2024 event?

The bitcoin halving 2024 event took place on the 19th of April this year, and reduced the reward that miners receive by adding new blocks to the blockchain from 6.25BTC to 3.125BTC. This reward decrease reduces the creation of new bitcoin. 

These bitcoin halving events take place after every 210,000 blocks are mined (approximately every four years), and are designed to control inflation and ensure that the total supply of bitcoin reaches its 21 million cap point. Historically, halvings have led to increased prices due to reduced supply and heightened interest.

This particular halving was significant because it took place during a period of economic recovery and growing institutional interest in Bitcoin, contributing to an increase in Bitcoin’s market value.

The history of bitcoin’s performance

Bitcoin has experienced several significant crashes since its creation in 2009. However, since then, every crash has been followed by periods of recovery that have helped to solidify its reputation as a volatile but resilient asset. Perhaps one of the worst crashes was in 2017-18, when bitcoin’s price fell from almost $20,000 to $3,000. Once again, though, bitcoin was able to regain momentum and reach new heights in 2020, fueled by the uncertainty caused by the pandemic. 

More recently, the market saw another downturn in 2022, when it lost over 60% of its value, but it bounced back in 2024, reaching this new $104,000 peak. This history of huge fluctuations highlights bitcoin’s ability to recover, even after huge crashes, and suggests that this trend may continue in the future.

So, is bitcoin dead?

While critics continue to argue that bitcoin is on its way out, its ability to bounce back after periods of such huge decline, as well as its current peak in market value means that it is clear (to us anyway) that bitcoin is not ‘dead.’ It does, however, remain highly volatile, with its fate relying on certain factors such as wider adoption, regulatory clarity and the evolving cryptocurrency market. 

If you’re interested in working within the cryptocurrency space, or you’re looking for a talented bitcoin expert to join your team, contact Plexus today. We help professionals to navigate the ever evolving industry of web3, blockchain and crypto!