Halve Time - Is Bitcoin the future of money?

If you haven’t already read Eric’s intro post explaining what this series is about, then you can catch up here. However, the basic idea is that we are writing a series of articles that celebrate the Halving. 

It’s a chance for us to ask what progress the crypto industry has actually made in the last four years, and to try and tackle some of the complex and challenging problems that might lie ahead. It’s a brief pause, a time to reflect, and a chance for the industry to get excited about how we plan to tackle the future.

I’ve been interested in crypto for a long time, and for me one of the most interesting arguments that we keep having is around the economic case for crypto. Is it a currency? Is it an investment? Does it have economic value? What is its role in society? What should it be? It’s an old debate, but I think the Halving is a perfect chance to explain why I still believe in the core promise of crypto, and why I think it will play a key role in the future of money.

Halvenomics

We’ve already talked about what the Halving is, but the element I want to look at is the link between the underlying code of Bitcoin and what it means from a wider economic perspective. At its core, a large part of Bitcoin's appeal is its predictable scarcity - something that the fiat currency system does not offer. Unlike traditional money, governed by central banks that can alter monetary policy on a whim, Bitcoin is governed by code. That code has been written, it is set, and that means that the total supply of Bitcoin is capped at 21 million, with the rate of new Bitcoin creation halving… at each Halving event. This inbuilt scarcity mechanism ensures that, unlike fiat currencies, the supply of Bitcoin is predictable and finite.

This predictability has some interesting implications. One of the most interesting is that we can theoretically work out future supply, and say how many Bitcoins will have been mined in 20, 50, or even 100 years. It is a level of certainty that is unprecedented in the history of money. It allows for a unique economic analysis, and a freedom from centralised decision making that traditional monetary systems cannot offer. 

This means, in theory, that every Halving is already priced in and will have no impact on price. That obviously is not the case…

Crypto as an asset class is changing 

Even though we can predict the supply perfectly, we still don’t have a way to predict demand. The demand side of the equation is always changing, and depends on a wide variety of factors - including the unpredictability of people. Economists sometimes write about “Homo Economicus” when crafting theories, and imagine a perfectly rational person who pursues wealth for their own interests and makes rational decisions. If the market was made up of people like this, investing would be easy. However, perfectly rational investors don’t exist, and that creates volatility.

Volatility is present for every asset, but crypto is still relatively young, and so it has historically lacked some of the depth and liquidity that other asset classes boast. Recently that has been changing.  Demand from retail and institutional investors has increased steadily as confidence and safe access to digital assets has improved. This is especially true for institutional investors in the US who now have access to the market via Bitcoin Spot ETFs. 

This change is a sign of the crypto industry maturing and a sign that the original promise of a more decentralised, transparent, and equitable financial system is just as appealing as it was in 2009. Just as the code of Bitcoin is fixed and permanent - the core promise of crypto is fixed and permanent. As more and more people embrace the value that offers, more investors will enter the market. We will see greater regulation, greater integration, an improvement in the quality of the industry and the actors within it, and a deeper acceptance of the intrinsic value that cryptocurrencies like Bitcoin offer. 

So, is Bitcoin the future of money?

It's the question that drives a million heated conversations, and my answer is 50/50 - in honour of the Halving. 

I believe there is still some way to go. But as we look ahead, it's clear that the principles underlying Bitcoin—predictability, scarcity, and decentralisation— are defining a broader shift in how we perceive and interact with money. In this new era, the Halving is not just a technical event; it's a celebration of the potential for a more stable, predictable, and fair financial system.