Bitcoin: A Modest Proposal

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Bitcoin, currently trading at a rather pedestrian $89,350 as of today, January 28th, has experienced a slight cooling from its previous, frankly excessive, peak of $126,198 last October. One suspects a correction was inevitable. The air, after all, is rarely thick enough to sustain such altitudes for long.

The possibility of a prolonged ‘crypto winter’ looms, naturally. A period of subdued enthusiasm and, dare one say, actual losses. Though, one must concede, the cyclical nature of these enthusiasms is rather predictable. A few years of giddy ascent, followed by a bracing descent. The pattern, while tiresome, is hardly novel. One wonders if this time, however, the chill might prove… persistent.

The question, then, is not whether Bitcoin is a good thing – that particular debate is best left to the zealots – but whether, at this price, it represents a sensible allocation of capital. A rather different proposition, wouldn’t you agree?

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The Bearish Perspective: A Slow Erosion

The arguments against are, predictably, numerous. The historical record, for one, suggests a rather monotonous cycle of boom and bust. Each ‘halving’ – a technical adjustment, of course – appears to usher in a brief period of irrational exuberance, followed by a rather more protracted period of regret. 2026, according to this reckoning, promises to be distinctly gloomy.

Beyond the charts, one finds a certain weariness with the narrative. The ETF launch, hailed as a watershed moment, has proven… underwhelming. The ‘Strategic Bitcoin Reserve’ appears to have had little impact. And the political winds, despite some initial murmurings of support, remain stubbornly still. It is a curious thing, this tendency to expect miracles from mere legislation.

Then there are the more apocalyptic pronouncements. The inherent instability of a ‘digital currency’ without the backing of a sovereign nation. The looming threat of quantum computing. The possibility that Bitcoin is simply… the wrong answer to a question no one has yet properly formulated. One tends to dismiss such anxieties, of course, but a prudent investor is never entirely complacent.

The Bullish Counterpoint: A New Order?

On the other hand, a certain momentum has undeniably developed. The ETF’s have, at least, provided a convenient vehicle for the inclusion of Bitcoin in more conventional portfolios. The iShares Bitcoin Trust, with a rather astonishing $69 billion under management, has become a significant player in the financial landscape. One must concede, it is a remarkable achievement for an entity that barely existed a few weeks ago.

The institutional interest is also noteworthy. Goldman Sachs, Morgan Stanley, and even BlackRock – names not generally associated with reckless speculation – have all dipped a toe into the digital waters. Their presence, while hardly a guarantee of success, does suggest a degree of seriousness previously lacking.

The persistent inflation in fiat currencies, while hardly a novel phenomenon, continues to erode the value of traditional assets. Bitcoin, with its limited supply, is often touted as a hedge against such debasement. One remains skeptical, naturally, but the underlying logic is not entirely unsound.

Furthermore, Bitcoin’s relatively low inflation rate compared to physical gold mining is a curious advantage. Perhaps, instead of wild fluctuations, we are witnessing the emergence of a slow-growing digital asset. A rather different proposition, wouldn’t you agree? Gold, meanwhile, continues to reach new, and frankly absurd, heights.

A Modest Proposal, Then?

The bulls and bears both have their arguments, naturally. The past two years have been… eventful, to say the least. I suspect many will disagree with my assessment, and I have no desire to impose my views on anyone. I merely seek to summarise the situation and offer a perspective, however flawed.

I believe the ETFs represent a genuine innovation and will continue to add value over time. The threat of quantum computing is, frankly, decades away, giving Bitcoin ample time to adapt. And its sheer scale makes it difficult to displace, even by a more technically sophisticated competitor.

Therefore, I expect Bitcoin to appreciate in value over the long term. A ‘crypto winter’ in 2026 or 2027 is entirely possible, and I would welcome it as a buying opportunity. My own portfolio currently allocates nearly 4% to Bitcoin and related assets – slightly above the recommended 2% – and I have no immediate plans to alter that balance. A gradual expansion, if my analysis proves correct, seems a sensible approach.

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2026-01-30 21:24