When it comes to Bitcoin and crypto, the narratives around them move in waves, particularly as we’re dealing with such young technologies. Bitcoin was launched in 2009, and has surged in price towards blow-off tops, and subsequent crashes, multiple times. On each occasion, there were several factors at work, but key narratives can be identified.
Back in 2013, we had very early, tech-savvy adopters picking up on what was envisioned as a new currency. In 2017, retail traders became caught up in the exuberance, and there was a sense that Bitcoin might be a kind of digital gold. And most recently, in 2021, we had the promise of institutional participation.
In fact, as we progress, the narratives start to operate alongside one another. The Lightning Network , a Layer 2 payment protocol for Bitcoin that was launched in 2018, aims to enable better BTC functionality as an everyday currency. And, BTC’s capacity to become a store of value (or digital gold) fed into the interest in 2021 of corporations such as Tesla and MicroStrategy as they acquired BTC. Also, let’s not forget the nation-state of El Salvador, which, also in 2021, adopted BTC as legal tender.
That final narrative, institutional adoption, looks set to develop as we move into the next phase of Bitcoin’s existence. The Bitcoin halving is coming in 2024, and this technical event that occurs every four years has up to now corresponded…