Someone sent me an article this week with the headline “Bitcoin: The Greatest Speculative Bubble in History?” The journalist had done the standard thing: found the recent price chart, noted the volatility, quoted a few sceptical economists, and concluded that Bitcoin fits the pattern of historical manias.
I have read versions of this article hundreds of times. The Bitcoin bubble argument is one of the most durable ideas in financial commentary. It has been published repeatedly for 15 years. It is wrong in ways that are worth examining carefully, because the argument tells you something important about how we assess new monetary technologies.
Let me look at the actual evidence.
What does Bitcoin’s price history actually show?
In October 2009, an online exchange called New Liberty Standard sold bitcoins for the first time. The price was $0.000994 per coin. Less than one tenth of a cent.
On 18 May 2010, a programmer named Laszlo Hanyecz made the first commercial Bitcoin transaction in history. He paid 10,000 BTC for two pizzas valued at approximately $25. The implied price was $0.0025 per bitcoin. That day is celebrated annually in the Bitcoin community as Bitcoin Pizza Day. Those 10,000 bitcoins, at any recent price level, represent an extraordinary sum. Nobody knew that then.
From that fraction of a penny, Bitcoin’s price has gone through four distinct market cycles over 15 years. Each cycle has followed a broadly similar pattern: a period of relative stability, followed by exponential price appreciation, followed by a severe correction, followed by a recovery that establishes a higher floor than the previous cycle.
In 2011, Bitcoim reached $31. It then fell 94% to $2. People called it dead.
In 2013, Bitcoim reached $1,242. It fell to around $160. People called it dead again.
In 2017, Bitcoim reached $19,783. It fell to approximately $3,200. Every newspaper in the world ran the bubble story.
In 2021, Bitcoin reached $69,000. It subsequently fell to approximately $15,500. The bubble story ran again, louder.
In early 2024, Bitcoin broke $73,000. In March 2025, it surpassed $100,000.
The key observation here is not the volatility. The key observation is the floor. After every cycle, the price recovered to a level substantially higher than the peak of the previous cycle. The people who called it dead in 2011 at $2 missed the 2013 cycle. The people who called it dead in 2018 at $3,200 missed the 2021 cycle. The people who called it dead in 2022 at $15,500 missed the 2024 cycle.
That is not the pattern of a bubble. That is the pattern of an asset going through price discovery as adoption broadens.
What is a bubble, actually?
The word “bubble” has a specific meaning. It refers to a situation where the price of an asset rises far above its fundamental value, driven by speculative momentum rather than genuine utility, and eventually collapses to near zero as the speculation unwinds. The Dutch Tulip Mania. The South Sea Company. The dot-com bubble, where companies with no revenue and no viable business model received billion-dollar valuations before collapsing entirely.
The critical feature of a true bubble is that when it pops, it does not recover. The Dutch tulip market did not come back. The South Sea Company did not come back. Many dot-com companies did not come back.
Bitcoin has had four major corrections of between 75% and 94%. It has come back from every single one. Each time to a new all-time high.
Robert Shiller, the Nobel laureate economist who correctly identified the 2008 housing bubble in advance, has called Bitcoin a bubble many times. He may yet be proven right. But his framework assumes that Bitcoin’s fundamental value is zero or near zero, that it is purely speculative with no genuine monetary utility. That assumption has been tested for 15 years and has not held.
The adoption argument.
Here is what the bubble narrative consistently misses: the adoption data.
In January 2024, the US Securities and Exchange Commission approved spot Bitcoin ETFs. Not from fringe crypto firms. From BlackRock and Fidelity, the two largest asset managers in human history. BlackRock’s Bitcoin ETF became the fastest in history to reach $10 billion in assets under management, achieving that milestone in under two months. In the first year of trading, spot Bitcoin ETFs attracted over $100 billion in cumulative inflows from institutional investors.
This is not speculative retail money chasing a bubble. This is pension funds, endowments, wealth management firms, and family offices making a deliberate allocation decision, with full regulatory oversight, to include Bitcoin in institutional portfolios.
MicroStrategy, now rebranded as Strategy, has adopted a corporate treasury strategy of purchasing Bitcoin with both operating cash and debt raised in capital markets. Their holdings, at the time of writing, represent the largest corporate Bitcoin treasury in the world. The logic is explicit and public: holding cash in a fiat currency that loses purchasing power at 12.8% per year is a losing strategy for a corporate treasury. Bitcoin, with a fixed supply and increasing institutional adoption, is a better treasury reserve asset. This model is now being replicated by firms in Japan, the United States, and globally.
The United States government is actively discussing a Strategic Bitcoin Reserve, the idea that the US might hold Bitcoin as a reserve asset to help defease the national debt. You may have strong views on whether that is good policy. But it is not the conversation a government has about a speculative bubble.
The fixed supply argument revisited.
I want to return to something fundamental, because the bubble argument usually skips over it.
Bitcoin Has a hard cap of 21 million coins. This is enforced by a global network of approximately 19,000 independent nodes. No person, no company, no government can change it. The supply schedule is fully known and has been fully known since January 2009. The next halving, the point at which the rate of new bitcoin creation gets cut in half again, is mathematically predetermined.
Fidelity Digital Assets, in their institutional research on Bitcoin, describes this as “an asymmetric risk opportunity”: an asset with a mathematically constrained supply and a rapidly growing base of institutional adopters, available at a price that still represents early-stage adoption relative to its eventual addressable market.
Think about what this means for the bubble argument. A bubble requires that the asset’s value eventually returns to near zero. For Bitcoin’s value to return to near zero, you would need institutional investors globally to decide simultaneously that a fixed-supply, decentralised, censorship-resistant monetary network with 15 years of uninterrupted operation has no value. That becomes harder to argue with every passing year of adoption, every new institutional allocation, and every regulatory approval.
What about the volatility?
I know what the sceptic is thinking: “But James, the price is incredibly volatile. A sound currency cannot be that volatile.”
This is a fair point, and I want to engage with it honestly. Bitcoin is currently volatile. It will remain volatile for some time. The volatility reflects the fact that Bitcoin is still in a price discovery phase, it is still early in its adoption curve, and it is still being sized by the global market against every other asset class simultaneously.
But volatility and bubbliness are different things. Gold was volatile in the 1970s as it transitioned from a fixed-price system to free-market price discovery. Equities in emerging markets are volatile. Early-stage technology adoption is volatile. Volatility is the price of early participation in an asset that is going through fundamental change.
Saifedean Ammous in “The Bitcoin Standard” makes the argument that Bitcoin’s volatility is actually decreasing over time as adoption broadens and the base of holders becomes more diverse and long-term oriented. The data supports this. Bitcoin’s annualised volatility was substantially higher in 2011 and 2013 than it is today. As the market deepens, the volatility will continue to decline. That is the pattern of monetary adoption, not speculative collapse.
My actual position.
I want to be direct about where I stand.
I do not know what the Bitcoin price will be in six months. Anyone who tells you they know is lying. Bitcoin is not an investment I hold because I have modelled the Q3 earnings. I hold it because I believe the fundamental case for a fixed-supply, decentralised monetary network is sound, and because I think the adoption trajectory over the next decade is likely to continue.
Bitcoin Has been declared dead more than 400 times by credible publications. It has come back every time. The people who called the 2018 bottom a terminal crash missed a 20x return from the lows. The people who called the 2022 crash a terminal collapse have watched the price recover past previous all-time highs.
The bubble story is compelling because it is simple. It fits a narrative we already understand. It lets you walk away from the complexity without engaging with the underlying argument about money, about supply, about what happens when a monetary network with fixed issuance meets a global reserve currency running a $39 trillion debt that must ultimately be inflated away.
I think the more interesting question is not “is Bitcoin a bubble?” The more interesting question is: “What happens to the price of the world’s only fixed-supply monetary asset as governments globally are forced to print more and more money to service debts that can no longer be repaid any other way?”
That is the question Lyn Alden is asking in “Broken Money.” It is the question your friend who sent you the bubble article is not asking. And until you sit with that question seriously, the bubble narrative is going to sound more compelling than it deserves to.
