Bitcoins and Bubbles: A History (So Far)

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The year, as they say, turned over. And with it, a certain digital curiosity – Bitcoin, or ‘bits’ as the more impatient traders call it – found itself rather less buoyant than anticipated. 2025, you see, wasn’t its finest hour. A dip of six percent, while the stock market was busy throwing confetti and generally behaving like a particularly pleased dragon, and gold, that ancient store of value, was having a positively glorious time. One might have expected a certain amount of grumbling from the faithful, a quiet rearranging of portfolios, and perhaps a strongly worded letter to the Oracle of Delphi (who, naturally, has a significant holding in gold futures).

It’s a habit, you see, amongst those who dabble in such things – these ‘investors’ – to occasionally step back and survey the landscape. To consider, if you will, the grand sweep of history, the rise and fall of empires, and the inherent instability of anything vaguely resembling a financial instrument. And when they do, they might still find themselves… intrigued by Bitcoin. But the question remains, doesn’t it? Is this digital ephemera capable of transforming a modest outlay into a sum that would make Croesus blush? A genuine millionaire-making machine?

A History of Sudden Wealth (and Equally Sudden Corrections)

Let’s not pretend this is entirely new. Bitcoin, in its relatively short existence, has demonstrated a knack for generating returns that would make a medieval alchemist weep with envy. Data compiled by BlackRock – a name that sounds suspiciously like a geological formation, but is, in fact, a rather large organization that manages other people’s money – reveals that, for eight out of eleven years (2013 to 2023, for the pedantic amongst you), Bitcoin outperformed everything. Everything! Even tulips during the Dutch craze. And 2024? A staggering 119% climb. One must concede, it has a certain…momentum. Though, as any student of history knows, momentum can be a fickle friend.

It’s a ‘global macro asset,’ they say. A phrase that sounds terribly important, and vaguely threatening. Influenced by ‘market sentiment’ and ‘changing liquidity.’ Which, translated from economist-speak, means people get excited and buy things, or they get scared and sell them. Over shorter periods, it’s all rather unpredictable. Like trying to herd cats with a feather duster. But over the long term…well, the price has skyrocketed by 21,140% in the last decade. A figure that, if expressed in gold doubloons, would fill a small country.

The Foundations, Such as They Are

In the early days, Bitcoin was viewed with the same suspicion as a travelling salesman offering enchanted beans. Extremely risky. But one suspects the risk diminishes with each passing year. The network, for one, remains remarkably robust. It’s like a digital fortress, guarded by algorithms and powered by…well, a lot of electricity. The ‘hash rate’ – the amount of computing power dedicated to processing transactions – has been growing steadily. A key metric, apparently. Though one wonders if all that computing power couldn’t be put to better use, like solving world hunger or inventing a decent cup of tea.1

It’s being integrated into the ‘traditional financial system.’ A phrase that always sounds like a contradiction in terms. Investment vehicles and payment methodologies are popping up like mushrooms after a rainstorm. And, surprisingly, politicians seem to be viewing it with less hostility. Perhaps they’ve finally realized that they can’t ignore it. Or perhaps they’re just hoping to get a cut.

Looking ahead a decade or more, one can cautiously predict that this trend will continue. Companies will find new ways to innovate and adopt Bitcoin. And there will be greater regulatory acceptance. These trends, if they materialize, will support Bitcoin being a less risky asset to own. Though, let’s be honest, ‘less risky’ doesn’t necessarily mean ‘safe.’

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Bullish Sentiments and the Pursuit of Digital Riches

To transform a modest investment into a fortune, one typically requires a rather substantial return. A 100-fold gain over the next 25 years, to be precise. That translates to a 20% annualized return. And it means that a $10,000 starting cash outlay will rise to $1 million. A sum that, in some circles, is considered ‘pocket change.’

Viewed through this lens, does Bitcoin have what it takes to deliver such a return? One wholeheartedly believes it does. That 20% annualized gain would actually be a deceleration, given its past performance. However, it’s critical that investors who buy this asset do their homework and truly understand what they own. It’s not enough to simply jump on the bandwagon. One must understand the underlying technology, the risks involved, and the potential rewards. It’s a bit like learning to ride a griffin – exhilarating, but potentially fatal.

To be clear, though, no one has any clue what the price of Bitcoin will be. The biggest bull out there is Michael Saylor, founder and executive chairman of Strategy. His price target of $21 million in 2046 is more than 215 times Bitcoin’s current price of about $97,000. If his forecast is accurate, an investment of about $4,500 today will make you a millionaire in 20 years. This is an extremely optimistic scenario. One might even call it… fanciful. But then again, history is full of surprises.

Making price predictions is a difficult game to play. At the end of the day, Bitcoin has had tremendous upside over the long run. And it can lift the prospects of a diversified portfolio. But it’s not a guaranteed path to riches. It’s a gamble, albeit a potentially lucrative one. And like all gambles, it’s important to know when to hold ’em, know when to fold ’em, know when to walk away, and know when to run.

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The pursuit of a decent cup of tea, one might argue, is a far more worthy endeavor than securing the future of global finance. But then again, one is a historian, not a tea connoisseur.

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2026-01-17 18:23