Back in September 2017 I wrote here about bitcoin passing 4,000 dollars and wondered whether it was a bubble or the start of a new economy. Back then, if you mentioned bitcoin at dinner, half the table smiled politely and the other half changed the subject. Four years later, bitcoin went above 60,000 dollars in April, set a new all-time high, then slid back down again. And the topic is no longer on the fringe: it is on the front page of the financial press.
I am not writing this to tell you what to buy. I am writing because something fundamental has shifted in how the world looks at crypto, and that shift is worth understanding. Also because at IconicMan, crypto is one of the topics we cover regularly. Let me say it up front, so it is clear: I am not a financial adviser, and what follows is not investment advice.
From enthusiasts to institutions
Until recently, crypto was the toy of a small community: programmers, libertarians, the curious and, let us be honest, a few speculators. Big institutions watched from the sidelines, sceptical or even dismissive. Over the past year, the picture has flipped almost completely.
- MicroStrategy, a US-listed software company, started moving a big part of its treasury into bitcoin in 2020 and kept on buying.
- PayPal began letting US users buy and sell cryptocurrencies directly in its app in late 2020. That means access for millions of people who would never have opened an account on a crypto exchange.
- Tesla announced in February 2021 that it had bought about 1.5 billion dollars worth of bitcoin.
- Coinbase, one of the largest crypto trading platforms in the US, went public on 14 April 2021 through a direct listing, without a classic IPO.
Each of these moments, taken on its own, is open to debate. Together, they say something simple: crypto has left the garage and entered corporate balance sheets, payment apps and the stock exchange. This is no longer just a tech curiosity, but something part of the market is starting to treat as an asset class.
Why some call it “digital gold”
The case made by people who see bitcoin as “digital gold” is fairly easy to follow. The maximum number of bitcoins is fixed in the code and cannot be printed at someone’s whim. It does not depend on a central bank or a government. It can be moved anywhere in the world, with no middlemen, in minutes.
The context helps this story a lot. After a year of pandemic and lockdowns, central banks and governments have pumped huge sums into the economy to keep it alive. Many people have asked, quite reasonably, what happens to the value of their money when the money supply grows that fast. For some, bitcoin became the answer: a store of value that cannot be diluted.
I think the argument has real logic, but also an obvious problem: gold has thousands of years of history behind it, bitcoin has a little over a decade. An asset that can rise or fall by tens of percent in a month does not yet behave like a calm store of value. Maybe it will get there. For now, it is more of a promise.
Dogecoin and the other side of the coin
If institutions are the serious face of the phenomenon, April 2021 also showed us the other face. Dogecoin, a coin started in 2013 literally as a joke, with a dog for a logo, blew up on social media. People who had no idea what a blockchain is bought in because “everyone is talking about it”.
I have nothing against jokes, but this is the classic recipe for a mania: a price that rises because it is rising, enthusiasm fuelled by social media algorithms, and the fear of missing out. When your taxi driver and your office mate give you tips on the same coin, that is the moment to be more careful, not more excited.
Central banks are watching closely too
One sign the subject is being taken seriously comes from the very people crypto set out to challenge. Many central banks are openly discussing and studying the idea of their own digital currencies. China is already testing a digital yuan, and in Europe and elsewhere there is more and more talk of a possible digital euro.
This does not mean central banks are “adopting” bitcoin. It means they have understood that money will become ever more digital, and they do not want to leave the field to others. For us, as users, this change will probably matter more than the day-to-day price of any coin.
What is still risky
Institutions coming in does not make crypto safe. Here is what I think is worth knowing before anything else:
- Volatility. The price can drop suddenly, sharply, for no obvious reason. It has done so several times already, and nothing guarantees it will not happen again.
- Scams. Where there is a lot of money and people in a hurry, fraudsters follow: coins invented overnight, “schemes” promising guaranteed returns, fake accounts posing as celebrities and asking you to send them crypto so you get double back. Nobody doubles your money out of kindness.
- Regulation. The rules are not clear yet and differ from country to country. A single government decision can change overnight how you can buy, use or declare crypto.
- Custody and keys. If you lose your private keys or your recovery phrase, the money is gone. There is no “forgot password” button. And if you keep your coins on a platform, you depend on its security and its integrity.
- Taxes. In many countries, crypto gains are taxable. Many people find out too late. Ask an accountant before, not after.
My attitude: curious, but with my seatbelt on
For years now I have worked for equity, not for fees, so I know what it is like to tie your money to something that may go very well or not at all. The difference is that with a startup you can see the people, the product and the numbers. In crypto, many people are only buying a story. That is why the rules I apply to myself, and recommend to anyone who asks, are simple:
- Understand before you buy. If you cannot explain in two sentences what you are buying and why, do not buy yet.
- Only money you can afford to lose. Not the rent, not the savings for your kids, not a loan.
- No leverage. Trading with borrowed money on such a volatile asset is the fastest way to lose everything.
- Basic security. Two-factor authentication, unique passwords, the recovery phrase written on paper and kept somewhere safe, never sent to anyone, never photographed.
- Do not chase the hype. If you hear about a coin on social media on the day it has multiplied several times, you have probably heard about it too late.
What has really changed
In 2017 I asked whether bitcoin was a bubble. The honest answer, in 2021, is that it can be both a bubble and something lasting at the same time: the price may be overdone, while the technology and the institutional interest may stay. The internet had its own bubble in the early 2000s, and that did not stop it from changing everything.
Crypto is no longer a curiosity. It is a young, risky asset class still looking for its place. It is worth understanding, even if you decide not to buy anything. What do you think: is bitcoin the digital gold of our generation, or just the biggest mania since the dot-com bubble?