Bitcoin’s often viewed as a volatile asset. And the largest cryptocurrency’s recent price action confirms as much. The bumpiness associated with bitcoin arguably belies the fact that it’s also resilient.
Though arguably underappreciated today, that resilience could foster more bitcoin adoption. It could also drive more investors to consider ETFs like the CoinShares Valkyrie Bitcoin Fund (BRRR ). Knowing bitcoin is resilient is one thing, but knowing how that foundation is built is also important. The network on which bitcoin transacts is an integral part of the equation.
It’s cumbersome and expensive to attempt to alter the bitcoin blockchain. As CoinShares pointed out in a recent report, altering a transaction on the bitcoin blockchain means a bad actor would need to control 51% of the network. And that requires spending of $2 million an hour, as of last month. For most cyber thieves, the juice isn’t worth that squeeze. Research indicates even a country is unlikely to disrupt the bitcoin blockchain.
“The researchers estimated that manufacturing enough rigs (if sufficient chips were available) would cost more than $20 billion, based on 40 million units at $500 each. Furthermore, the attack would cost nearly $8 million per [hour. That’s because] of the amount of computing power the new rigs would introduce to the network,” according to Coinshares.
Scarcity Helps, Too
Bitcoin is often called “digital gold.” Part of the reason why is that the digital currency is scare. That’s true of gold, too. But bitcoin’s supply is capped at 21 million coins. That’s a trait some market observers believe adds to its properties as a resilient asset. That scarcity could actually help the cryptocurrency capture a larger share of the global monetary system over the long term,
“Research by CoinShares, conducted to predict bitcoin’s future value based on adoption as a medium of exchange, suggests that it will most likely achieve a 3.5% share of the market by 2039. If correct, this outcome would represent remarkable progress in a relatively short span of time and have a corresponding impact on bitcoin’s price,” added CoinShares.
Another reason bitcoin is often compared to gold is that the former is making an increasingly compelling case as store of value. That’s something that could boost adoption of ETFs like BRRR while cementing the case for resilience.
“Stores of value also serve as a hedge against inflation, both for investors and individuals. It’s no coincidence that inflation in Nigeria, ranked second in the latest bitcoin adoption index published by Chainalysis, has hovered around 30% for most of 2024. Other countries that experienced elevated inflation, including Turkey, Argentina and Venezuela, featured in the top 20,” concluded BRRR’s issuer.
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