The Market Shift You Can’t Ignore

Bitcoin, blockchain and cryptocurrency were all hot topic trends a few years back. But technology waits for no one, and with all the hype around AI, you’d be forgiven for thinking it’s been forgotten. Not so.

In fact, those who have been keeping up with the news will have noticed that there’s been a resurgence of interest in the decentralized digital currency and the revolutionary distributed ledger technology that it’s built on.

So why is this? What impact will it have on the value of bitcoins – one of the best-performing investments in living memory? And what is the current state of play of the technology that many have predicted will be the “future of money”?

Let’s take a look at what’s going on in the world of bitcoin, blockchain and cryptocurrency as we head into 2025!

So Remind Me – What Is Bitcoin Again?

Bitcoin is the first and best-known cryptocurrency, a type of digital currency. Cryptocurrencies (or “crypto”) differ from earlier digital currencies in two key ways. First, they are decentralized, meaning the database that records balances and transactions (called a blockchain) is shared across hundreds of thousands of computers. These computers must reach “consensus,” so no single person or organization controls the network. Second, transactions are secured with encryption, allowing only those with the right keys to access and spend funds in their private wallets.

Some believe Bitcoin or other cryptocurrencies could become the foundation of future financial systems. This is because they can handle transactions without middlemen or central banks, avoiding issues like inflation caused by currency value manipulation. However, critics argue crypto doesn’t solve these problems and introduces others, including high environmental costs and challenges in regulation, which attract money launderers, criminals, and scammers.

However, Bitcoin is probably most famous for its explosive growth in value. In 2010, 10,000 Bitcoin were used to buy two pizzas. Today, one Bitcoin is worth nearly $100,000—an increase of close to five billion percent. In comparison, gold rose by just over 100% in the same period, while the value of the US dollar dropped by about 45% due to inflation.

The Trump Train

Whether you view him as a controversial or transformative figure, Trump’s influence on financial markets as both the 45th and 47th president is undeniable. Trump’s ringing endorsement of Bitcoin – a markedly different attitude to that of former incumbents -is being credited with accelerating the current resurgence of interest in cryptocurrency.

Since announcing his belief that the US should stockpile the digital currency at a convention in the summer of 2024, the price of Bitcoin has rocketed, and mainstream interest in its use as an investment vehicle is off the scale.

Bitcoin fans say that Trump’s interest will drive other countries to integrate cryptocurrencies into their own economic strategies. This will hasten its adoption into the global financial system, further driving up its value and leading to more innovation and disruption.

So What Are Altcoins?

Altcoin is a name used to describe cryptocurrencies other than Bitcoin, so it refers to alternative coins. Currently, the market cap of all cryptocurrencies stands at around $3.5 trillion – slightly higher than the GDP of the UK ($3.4 trillion).

The most well-known altcoin and number-two cryptocurrency is Ethereum, which is blockchain-based like Bitcoin but includes additional functionality. This includes the ability for computer code to be executed on the blockchain, enabling smart contracts. This would allow a blockchain to be programmed to automatically make a payment when pre-determined conditions are met, such as a piece of work being completed.

Another category of altcoin is meme coins. These are cryptocurrencies based on internet memes, the most famous one being Doge Coin, based on a popular image of a dog, frequently shared on social media and internet message boards. Sounds like a joke, right? Except the market cap of meme coins stands at $120 billion as of writing, and Elon Musk is apparently planning on naming a new branch of the US government after Doge.

The Future Of Money?

So, what does the future hold for Bitcoin and cryptocurrency – once seemingly close to forgotten as the AI craze took hold, but now firmly back on the agenda?

The resurgence in interest – not to mention monetary value – suggests that the technology is resilient and unlikely to simply fade into obscurity, as was predicted during its slump.

But will it go on to become the backbone of a new, fairer and more efficient financial infrastructure, as fans believe? Or will it always be a speculative bubble facilitating gambling, get-rich-quick schemes and scams?

Well, a lot may depend on how successful the incoming US president’s planned shake-up of the economy will be. This is a question that economic analysts are currently divided on.

With increasing adoption and high levels of FOMO due to its rocketing price, its status as a store of value and hedge against inflation – which had led to it sometimes being considered as “digital gold” counts in its favor. The ongoing evolution of more innovative features and functionality, such as Ethereum’s smart contracts, will likely add to this.

On the other hand, there are clearly still challenges around regulation, such as the high level of volatility that leads to regular crashes in value and high levels of energy use.

All of this may count for little in the end, however. Bitcoin has already forced us to rethink the way we treat currency and value, demonstrating that it may be possible to build a more efficient and democratic financial system based on technology and mathematics rather than central banks.

And as with other transformative technologies – AI and the internet being two examples – once Pandora’s box is opened, it’s very hard to stop it from changing the world.