Cryptocurrencies: Monetary Revolution or Speculative Mirage?

In barely a decade, cryptocurrencies have burst onto the global financial scene, shaking up long-held beliefs and dividing experts and investors alike. Born out of deep distrust toward central banks and the traditional financial system, they are now being courted by the very institutions that once dismissed them. Behind this paradox lies a polarizing debate: are cryptos a lasting revolution or a speculative bubble destined to burst sooner or later?

An Ideology Forged in Response to Repeated Financial Crises

Bitcoin, the forefather of all cryptocurrencies, is not just a technical innovation—it is a manifesto. Created in the wake of the 2008 financial crisis, it embodies a rebellion against banking excesses and the unlimited monetary creation by central banks. Its first block contains an explicit message: “Chancellor on brink of second bailout for banks.” The tone was set.

Inspired by the cypherpunk movement and the Austrian school of economics, this vision rejects the state monopoly on money. It proposes a system where trust is placed in code, not institutions. Its cap of 21 million units is a direct response to inflationary policies. Bitcoin aims to become “digital gold.”

But this ideology has grown more complex. Authoritarian states now use blockchain to monitor financial flows. State-backed cryptocurrencies (like the digital yuan) embody a paradoxical form of technological centralization.

Central Banks: Between Challenge and Adaptation

Cryptocurrencies challenge the role of central banks. By escaping their control, they threaten their ability to regulate inflation, stabilize markets, and manage the money supply.

The response? A countermeasure: CBDCs (Central Bank Digital Currencies). Over 130 countries are exploring or testing sovereign digital currencies. China, Europe, the United States, and even African nations like Nigeria are making progress in this area.

Central banks aim to regain control by combining blockchain’s advantages (traceability, speed, lower costs) with institutional oversight. Yet regulation remains fragmented, and private cryptocurrencies continue to grow.

Why Wall Street Changed Its Tune

Once hostile, major financial institutions have changed course. By 2025, over one million bitcoins are held by companies, including 725,000 by publicly traded firms.

Giants like JPMorgan, Fidelity, BlackRock, and Goldman Sachs now offer Bitcoin ETFs, crypto payment services, and funds backed by digital assets. Annual crypto trading volume in the U.S. exceeds $4.46 trillion.

Why the reversal?

• Client pressure: Institutional and retail investors want a piece of the pie. Banks follow demand.

• Search for yield: In a zero-interest world, cryptos appeared as a speculative oasis.

• Blockchain’s economic potential: Beyond Bitcoin, the technology promises transparency and efficiency. Smart contracts and decentralized finance are being explored by many players.

• Diversification: Some see it as a hedge asset—though its strong correlation with tech stocks is a warning.

Traditional finance no longer fights crypto—it integrates it. Where there’s a market, Wall Street is never far behind.

Can the Appeal Last?

The question isn’t whether cryptos attract interest—they do—but whether that appeal can endure.

Their viability will depend on the ecosystem’s ability to address four major challenges:

• Extreme volatility: Bitcoin can double or halve in value within months. Hard to imagine it as a daily currency.

• Massive ecological cost: Proof-of-work consumes colossal energy. Ethereum has begun shifting to more efficient mechanisms, but the issue remains.

• Regulation on the horizon: Europe has launched its MiCA framework, and the U.S. is regulating stablecoins. Regulation may bring legitimacy but could erode the initial promise of freedom.

• Still marginal adoption: Despite the hype, paying for coffee with Bitcoin remains rare. Today, usage is mostly speculative.

Yet the numbers are staggering. In 2013, all cryptos combined had a market cap under $1.5 billion. By December 2017, at the peak of the first major bubble, it reached around $830 billion. In early 2021, boosted by institutional investors, the market crossed the symbolic $3 trillion mark, before falling back to around $1 trillion in 2022. In 2023–2024, it fluctuated between $1.2 and $1.5 trillion, showing resilience despite extreme volatility.

To put these figures in perspective: the total value of gold held worldwide is estimated at around $12 trillion. In other words, all cryptos today weigh barely a tenth of gold, even though they sometimes claim to rival it as a store of value. The comparison highlights both the long road ahead and the expansion potential that fuels investor appetite. Never has such a young asset class exploded so rapidly.

In terms of volatility, gold shows relative stability with typical annual fluctuations of 15–25%, while Bitcoin’s volatility is three to four times higher. This difference reflects the respective maturity and liquidity depth of these markets. Gold enjoys millennia of recognition and universal acceptance that cryptocurrencies have yet to achieve. This historical legitimacy remains a durable advantage, especially in times of systemic crisis.

What Do Leading Economic and Financial Figures Think?

Warren Buffett, the “Oracle of Omaha,” has never hidden his skepticism. To him, Bitcoin is an “illusion,” an asset “without intrinsic value,” even “rat poison squared.” He has repeatedly stated that cryptocurrencies “will end badly,” refusing to include Bitcoin in Berkshire Hathaway’s portfolio. Yet the fund has invested over $1 billion in Nubank, which is exposed to crypto.

Bridgewater Associates founder Ray Dalio acknowledges Bitcoin’s weaknesses but sees potential as an alternative store of value and inflation hedge. He recommends holding a moderate amount in a diversified portfolio. Dalio himself owns “a bit of Bitcoin,” though he prefers gold for its stability.

After calling Bitcoin a “fraud,” a “Ponzi scheme,” and “worse than tulip mania,” JPMorgan CEO Jamie Dimon now offers crypto products to clients.

Among economists, Nouriel Roubini denounces a toxic bubble, while Paul Krugman and Joseph Stiglitz respectively call it a “self-fulfilling bubble” and a “tool to circumvent the law.” Eugene Fama predicts Bitcoin will fall to zero, while Jean Tirole calls it “utter madness.”

Ponzi Scheme or New Asset Class?

The comparison keeps coming up: is Bitcoin a global Ponzi scheme?

Some crypto projects have undeniably been Ponzi schemes: BitConnect, OneCoin, PlusToken defrauded billions. But can the same be said of Bitcoin or Ethereum?

Some say yes: no intrinsic value, a buyer-funded seller logic, and speculative dependence.

Others say no: no central organizer, no promised returns. The market is free—like art or gold.

Beyond Bitcoin, projects like Ethereum offer real use cases—smart contracts, decentralized finance, NFTs. It’s no longer just speculation, but potential infrastructure.

The truth likely lies in between: many cryptos will vanish, but a few may become lasting components of the financial future.

Nothing Is Set in Stone

Cryptocurrencies were born out of a cry of rebellion against the established monetary order. Ironically, they are now being courted by the very institutions they sought to abolish.

Their future will depend on their ability to integrate into coherent regulatory frameworks, address environmental challenges, and above all, offer real utility beyond speculation.

----------------------------------------------------------------------------------------------------------------------------

References

Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System.

Bank of International Settlements (BIS). (2021). Central Bank Digital Currencies: Foundational Principles and Core Features.

European Central Bank (2020). Report on a digital euro.

IMF (2022). Global Financial Stability Report.

Banque de France (2024), « Quel avenir pour le monde des crypto-actifs ? »

Chainalysis (2022). The 2022 Crypto Crime Report.

World Economic Forum (2021). Crypto, What Is It Good For? An Overview of Cryptocurrency Use Cases.

Gandal, N., Hamrick, J., Moore, T., & Oberman, T. (2018). Price Manipulation in the Bitcoin Ecosystem. Journal of Monetary Economics.

Houben, R., & Snyers, A. (2018). Cryptocurrencies and blockchain. Legal context and implications for financial crime, money laundering and tax evasion. European Parliament.

Dalio, Ray. (2021). The Changing World Order.