{"id":712860,"date":"2025-07-16T16:18:13","date_gmt":"2025-07-16T06:18:13","guid":{"rendered":"https:\/\/www.gomarkets.com\/?p=712860"},"modified":"2025-07-16T16:19:11","modified_gmt":"2025-07-16T06:19:11","slug":"what-gives-bitcoin-its-value","status":"publish","type":"post","link":"https:\/\/www.gomarkets.com\/en\/articles\/cryptocurrency-trading\/what-gives-bitcoin-its-value\/","title":{"rendered":"What Gives Bitcoin Its Value?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Bitcoin hit a new all-time high (ATH) on July 14, rising to $122k for the first time in its history.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On this same day in 2010, a single Bitcoin was worth\u2026 $0.07.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This incredible rise from a near-worthless digital experiment to a $2.5 trillion asset class begs the question: What is it exactly that makes Bitcoin so valuable?<\/span><\/p>\n<figure id=\"attachment_712157\" aria-describedby=\"caption-attachment-712157\" style=\"width: 1835px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-712157 size-full\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/BTCUSD_2025-07-14_15-27-42.png\" alt=\"\" width=\"1835\" height=\"850\" \/><figcaption id=\"caption-attachment-712157\" class=\"wp-caption-text\">Bitcoin price 2012-2022<\/figcaption><\/figure>\n<h2><b><br \/>\nWhat Gives <\/b><b><i>Any <\/i><\/b><b>Currency Its Value?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Since the dawn of organized trade, humans have searched for what economists call &#8220;sound money&#8221; \u2014 a currency that facilitates transactions while still maintaining value over time.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-712159\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/Table-Chart_01.png\" alt=\"\" width=\"1248\" height=\"1012\" \/><\/p>\n<p><span style=\"font-weight: 400;\">After centuries of trial and error, <\/span><b><i>gold <\/i><\/b><span style=\"font-weight: 400;\">eventually emerged as the universally accepted currency. Its scarcity, durability, and divisibility made it great for storing and transferring value.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But physical gold wasn\u2019t able to satisfy <\/span><i><span style=\"font-weight: 400;\">all <\/span><\/i><span style=\"font-weight: 400;\">the traits of sound money \u2014 it was heavy, difficult to transport, and vulnerable to theft during long-distance trade.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To address these limitations, a new solution was found \u2014 countries began issuing paper currency guaranteed by the government, backed by gold reserves.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This paper currency is (more or less) the currency we know today. And for the past few hundred years, it was the currency that satisfied the <\/span><i><span style=\"font-weight: 400;\">most <\/span><\/i><span style=\"font-weight: 400;\">requirements for sound money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, as we entered the digital age, the idea that a \u201cdigital currency\u201d could be created to satisfy <\/span><b><i>all <\/i><\/b><span style=\"font-weight: 400;\">sound money criteria began to gain traction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is where Bitcoin comes in.<\/span><\/p>\n<h2><b>The Bitcoin Breakthrough<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Multiple attempts to create a digital version of sound money were made throughout the 1990s and 2000s. But they all ran into the same problem: double spending.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The inherent issue with anything digital is that it can be easily copied. There needed to be a way to prevent people from simply copying a digital currency file and \u201cdouble-spending\u201d it in multiple places.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This created a situation where the last two traits of sound money \u2014 Censorship Resistance and Counterfeit Resistance \u2014 could not be satisfied simultaneously.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To satisfy Counterfeit Resistance, double spending had to be prevented. To prevent double spending, a central authority was needed to verify transactions, which opened up the currency to censorship.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It wasn\u2019t until 2008, when a paper named \u201c<\/span><a href=\"https:\/\/bitcoin.org\/bitcoin.pdf\"><span style=\"font-weight: 400;\">Bitcoin: A Peer-to-Peer Electronic Cash System<\/span><\/a><span style=\"font-weight: 400;\">\u201c was innocuously sent to a cryptography mailing list, that a solution was discovered.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead of relying on a central authority, Bitcoin proposed a distributed network where every participant keeps a copy of every transaction that has ever occurred.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This shared ledger (now better known as \u201cthe blockchain\u201d) is maintained by a network of thousands of computers (nodes) around the world.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When someone wants to send Bitcoin, they need to broadcast their transaction to the network. The computers then work together to verify that the sender actually owns the Bitcoin and hasn&#8217;t already spent it elsewhere.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If everyone has a complete record of all transactions, double spending becomes impossible. You can&#8217;t spend the same Bitcoin twice because the entire network can see your complete transaction history.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This breakthrough meant, for the first time, a form of currency existed that could (theoretically) satisfy <\/span><i><span style=\"font-weight: 400;\">all <\/span><\/i><span style=\"font-weight: 400;\">the traits of sound money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-712158\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/Table-Chart_02.png\" alt=\"\" width=\"1348\" height=\"1032\" \/><\/span><\/p>\n<p>However, the fact that Bitcoin satisfies these traits does not automatically make it valuable.<\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin\u2019s \u201csound money\u201d breakthrough was just a novelty; it still needs practicality with a clear fundamental value add to justify having any worth.<\/span><\/p>\n<h2><b>What Gives Bitcoin Its <\/b><b><i>Fundamental <\/i><\/b><b>Value?<\/b><\/h2>\n<p><b>It created a new technology. <\/b><span style=\"font-weight: 400;\">The blockchain solution was far more reaching than just preventing double-spending. Blockchain introduced a way to create permanent, tamper-proof records without requiring a central authority to maintain them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This unlocked possibilities across virtually every industry. Everything that previously required a trusted middleman to verify, record, or enforce agreements could now be rebuilt on this trustless infrastructure.<\/span><\/p>\n<p><b>It has <\/b><b><i>absolute <\/i><\/b><b>scarcity.<\/b><span style=\"font-weight: 400;\"> Bitcoin&#8217;s supply is permanently capped at 21 million coins, written into its code and enforced by the network. This creates predictable, verifiable scarcity. Unlike gold, where new deposits can be discovered, Bitcoin&#8217;s scarcity is mathematically guaranteed.<\/span><\/p>\n<p><b>It is censorship-resistant.<\/b><span style=\"font-weight: 400;\"> Bitcoin transactions cannot be blocked, reversed, or frozen by governments or financial institutions. This makes it valuable for those living in countries where traditional money systems might be unreliable or compromised.<\/span><\/p>\n<p><b>It is globally accessible.<\/b><span style=\"font-weight: 400;\"> Anyone with internet access can send or receive Bitcoin anywhere in the world, 24\/7. This makes it particularly valuable in regions with limited banking infrastructure or restrictive governments.<\/span><\/p>\n<p><b>Bitcoin is decentralized and secure<\/b><span style=\"font-weight: 400;\">. Because the Bitcoin network operates through thousands of nodes worldwide, it means no single entity can control, manipulate, or shut down the network.<\/span><\/p>\n<p><b>It is transparent and auditable.<\/b><span style=\"font-weight: 400;\"> Every Bitcoin transaction is recorded on its public ledger that anyone can verify. This ledger has been running with 100% uptime for over 12 years, with its only two minor downtime events occurring early in its formative years.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-712155\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/Screenshot-2025-07-14-145548.png\" alt=\"\" width=\"1305\" height=\"668\" \/><\/p>\n<h2><b>How Much of Bitcoin\u2019s Value is Speculative?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">So, Bitcoin has a good fundamental value proposition, but does it justify its nearly $2.5 trillion market valuation?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The short answer is no. Just like gold, if you valued it only on its practical usability, its market cap would be significantly lower.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other cryptocurrencies like Ethereum, Solana, and Tron all have a far superior tech stack, yet Bitcoin has a valuation over five times these assets combined.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-712154\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/Screenshot-2025-07-14-150132.png\" alt=\"\" width=\"715\" height=\"358\" \/><\/p>\n<p><span style=\"font-weight: 400;\">However, like gold, if you start to derive Bitcoin&#8217;s value from beyond its core functionality, its huge market cap begins to make more sense.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin has achieved <\/span><b>institutional adoption <\/b><span style=\"font-weight: 400;\">well beyond any of its counterparts. Major corporations, hedge funds, and even nation-states have added Bitcoin to their balance sheets. The most notable of which is MicroStrategy, with current holdings of <\/span><a href=\"https:\/\/www.strategy.com\/purchases\"><span style=\"font-weight: 400;\">597,325 BTC<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><b>US Spot Bitcoin ETFs <\/b><span style=\"font-weight: 400;\">went live in January 2024, the first-ever crypto spot ETF in the US. They have seen over USD$50 billion in combined inflows since launch and generated the <\/span><i><span style=\"font-weight: 400;\">biggest <\/span><\/i><span style=\"font-weight: 400;\">first-year inflows on record (beating out Gold ETFs&#8217; long-standing record).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And Donald Trump has signed an executive order to create a <\/span><b>US Strategic Bitcoin Reserve <\/b><span style=\"font-weight: 400;\">\u2014 turning Bitcoin into a national stockpile asset alongside Gold and Oil to help prop up the US Dollar.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">More nuanced value can also be derived from things like Bitcoin\u2019s <\/span><b>15-year<\/b> <b>track record <\/b><span style=\"font-weight: 400;\">of resilience, its<\/span><b> community network effects, <\/b><span style=\"font-weight: 400;\">and the <\/span><b>anonymity of its creator <\/b><span style=\"font-weight: 400;\">\u2014 <\/span><a href=\"https:\/\/www.investopedia.com\/terms\/s\/satoshi-nakamoto.asp\"><span style=\"font-weight: 400;\">Satoshi Nakamoto<\/span><\/a><b>.<\/b><\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_712156\" aria-describedby=\"caption-attachment-712156\" style=\"width: 968px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-712156\" src=\"https:\/\/www.gomarkets.com\/au\/wp-content\/uploads\/2025\/07\/ezgif-5848503815b809.jpg\" alt=\"\" width=\"968\" height=\"660\" \/><figcaption id=\"caption-attachment-712156\" class=\"wp-caption-text\">Sculpture of Satoshi in Switzerland that vanishes from certain angles<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\"><br \/>\nAll these factors, combined with its fundamentals, make a strong case for a high Bitcoin valuation. Whether that valuation is as enormous as $2.5 trillion is up for debate. Still, we can be confident that Bitcoin is not a <\/span><b><i>purely<\/i><\/b><span style=\"font-weight: 400;\"> speculative asset, like many critics have touted in the past.<\/span><\/p>\n<h2><b>Summary<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Bitcoin has legitimate technical and economic properties that create genuine value. It is the first form of truly sound money, and it has introduced fundamental innovation that is revolutionary in many ways.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, like many new technologies, the market is still feeling out what it&#8217;s actually worth. The $2.5 trillion valuation could be justified, or it could be a bubble, or both at different times.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What is clear is that Bitcoin isn&#8217;t going away. Whether it becomes a major part of the global financial system or remains a niche asset, it has established itself as a permanent fixture in financial markets that can&#8217;t be ignored.<\/span><\/p>\n<p><b>Start trading Bitcoin and 38 other <\/b><a href=\"https:\/\/www.gomarkets.com\/au\/cryptocurrency-cfd-trading\/\"><b>Cryptocurrency CFDs<\/b><\/a><b> on Wixad today.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin hit a new all-time high (ATH) on July 14, rising to $122k for the first time in its history.\u00a0 On this same day in 2010, a single Bitcoin was worth\u2026 $0.07. This incredible rise from a near-worthless digital experiment to a $2.5 trillion asset class begs the question: What is it exactly that makes [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":712861,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,4424,4382,4532],"tags":[],"class_list":["post-712860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-cryptocurrency-trading","category-featured","category-general-trading-information"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Gives Bitcoin Its Value? - Wixad<\/title>\n<meta name=\"description\" content=\"What drives Bitcoin&#039;s massive value? 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