Bitcoin has repeatedly broken through to new all-time highs recently, reigniting discussions about its value and future potential. Alex Thorn, Head of Research at Galaxy, published a detailed analysis on the social platform X, discussing why Bitcoin is positioned to become one of the greatest investments in history—even without traditional "intrinsic value." His post included personal anecdotes, market insights, and a thoughtful debate on the nature of value itself.
Recent Market Performance and Volatility
After a day of significant price swings, Bitcoin traded above $67,000, reaching $69,324 on Coinbase and marking its first new all-time high since November 10, 2021. This milestone arrived after 846 days, signaling a strong resurgence. Notably, both physical gold (XAU) and Bitcoin reached record highs simultaneously—a first in history, but likely not the last.
However, Bitcoin's volatility remains a challenge for new investors. Immediately after setting the record, BTC plummeted by 14.3%, hitting an intraday low of $59,224 before partially recovering. This sharp decline was exacerbated by massive long liquidations—over $400 million between 2 PM and 3 PM ET alone. In the past 24 hours, total liquidations across crypto futures exchanges exceeded $1 billion, with long liquidations accounting for over $800 million.
Despite the turbulence, Bitcoin quickly rebounded to $67,000, actually gaining $4,000 since Monday morning. Such volatility is expected to continue as the market climbs the proverbial "wall of worry."
Breaking through previous all-time highs is never straightforward. In 2020, after first touching the prior record (around $20,000 from December 17, 2017), it took Bitcoin 16 days to decisively break through. During that period, BTC twice touched that level and then fell by 12.33% before ultimately rallying higher.
Anecdotes from Long-Term Holders
From a psychological and technical analysis perspective, previous all-time highs often act as resistance. Interestingly, Alex Thorn shared that his mother sold some of her BTC at $68,850. He marveled at her timing—joking that she might not be as staunch a believer as he is.
Data suggests that some long-dormant coins were moved on-chain yesterday, possibly sold by early holders. A significant amount of coins dating back to 2010 became active, potentially indicating profit-taking. Everyone has a price, and after holding for 14 years, some may have decided that now was their time to cash in.
This is characteristic of Bitcoin bull markets: veterans transfer coins to newcomers, broadening ownership. However, it's also possible that these movements were simply holders consolidating their coins into new custody solutions—not necessarily selling.
Analyzing Coin Days Destroyed (CDD), a metric that measures the activity of long-held coins, we can observe that spikes often correspond with market tops or bottoms. Recently, we've seen some elevated CDD days, but nothing extreme. For instance, a significant spike in early 2022 was due to the U.S. government seizing $3.6 billion in BTC from the Bitfinex hack—not typical market activity.
It appears that much older coins have yet to enter the market en masse. To unsettle these veteran holders, even higher prices may be needed.
ETF Inflows and Institutional Adoption
Bitcoin ETFs recorded their largest single-day trading volume ever, exceeding $10 billion. They also saw record daily inflows and the second-largest net inflows since launch, at +$648 million. This represents over 10,000 BTC absorbed by ETFs—more than ten times the daily mining production of approximately 950 BTC. These inflows are not only continuing but seem to be accelerating.
As this bull market progresses, we will continue to face a wall of worry. Bull markets are non-linear, punctuated by significant corrections. For example, from January 1, 2017, to the December 17, 2017, peak near $20,000, Bitcoin experienced 13 pullbacks of 12% or more (12 of which were over 15%, and 8 over 25%).
A similar pattern occurred in 2020. From the COVID-19 low of $3,858 on March 12, 2020, to the April 14, 2021, high of $64,899, there were 13 corrections of 10% or more (7 of which were 15% or greater).
Yesterday’s price action doesn’t necessarily indicate an end to the upward trend. Instead, it serves as a baptism by fire for new ETF investors experiencing Bitcoin’s volatility firsthand.
The Myth of Intrinsic Value
Thorn also engaged in a debate about Bitcoin’s intrinsic value—a discussion he acknowledges isn’t always productive. Satoshi Nakamoto once wrote, "If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry." But Thorn does have time.
One argument he encountered was that the U.S. dollar has intrinsic value because it is backed by the "full faith and credit" of the U.S. government. While that backing is real and meaningful, it doesn’t equate to intrinsic value. Intrinsic value typically refers to something that can be consumed or used directly: oil can fuel engines, corn can be eaten, and gold can be crafted into jewelry.
The dollar has no such intrinsic value—unless you plan to burn banknotes for warmth. Monetary instruments don’t require intrinsic value; in fact, no fiat currency in the world today possesses it. Moreover, it’s better for money not to have intrinsic value. Money is a tool for storing and transferring labor across time and space—not for direct consumption.
Bitcoin takes this concept to the extreme. Imagine having all the properties of fiat money without the drawbacks: a fungible, easily transferable, divisible, global currency that is weightless, not issued by any central bank, and with a mathematically fixed supply.
Skeptics often respond with, "That’s not how the world works." Those in power—elites, entrenched intermediaries—want you to believe that the world is rigid, systems are secure, institutions are permanent, and everything is already figured out. But that thinking is flawed.
The world is far more complex and older than we realize. Revolutions are disruptive because they overturn existing orders. Human progress, like the Bitcoin chart, is non-linear. We advance in leaps, questioning old assumptions and embracing new solutions.
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Frequently Asked Questions
Why is Bitcoin considered valuable if it has no intrinsic value?
Value is not solely derived from physical utility. Bitcoin’s value comes from its scarcity, decentralization, security, and growing acceptance as a store of value and medium of exchange. Like fiat money, its value is based on collective trust and adoption.
How do Bitcoin ETFs affect its price?
ETFs make it easier for institutional and retail investors to gain exposure to Bitcoin without holding it directly. This increases demand, which can drive up prices, especially since ETFs often purchase large quantities of BTC to back their shares.
What causes Bitcoin’s extreme volatility?
Bitcoin’s relatively small market size compared to traditional assets, coupled with speculative trading, news events, and market sentiment, leads to high volatility. As adoption grows and markets mature, volatility may decrease.
Is it too late to invest in Bitcoin?
While Bitcoin has already seen significant growth, many analysts believe it is still in the early stages of adoption. However, it's essential to research thoroughly, understand the risks, and only invest what you can afford to lose.
How can I securely store Bitcoin?
Use reputable hardware wallets or cold storage solutions for long-term holdings. For active trading, consider secure exchanges with strong track records and two-factor authentication.
Will Bitcoin replace traditional currencies?
It's unlikely to replace fiat currencies entirely in the near term. However, it could coexist as a complementary asset class, a hedge against inflation, and a means for value transfer across borders.
This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with independent financial advisors before making any investment decisions. The cryptocurrency market is highly volatile and involves substantial risk.