Why Has Bitcoin Become Popular? What the Experts Say

Bitcoin has no gold in a vault behind it, no government promising to honor it, no company reporting earnings, no dividends, no board of directors. But more than fifteen years after it was launched by Satoshi Nakamoto, it trades as the most expensive and desirable cryptocurrency. Why?

Bitcoin is literally backed by nothing. Why do people continue to trade, sell, buy, and store it? Let's break it down.

A Very Short History of Money: From Cattle to Fiat

Let's start with a question: What backs any money?

For most of human history, "money" was a physical commodity that people already valued for other reasons. Cattle, grain, salt, shells, and above all metals such as gold and silver served as money because they were durable, divisible, portable, and scarce.

A gold coin was worth something because the metal itself was prized, but carrying and guarding metal was inconvenient, so societies gradually moved to representative money. For example, paper notes were claims on a commodity held elsewhere. Under the classical gold standard of the 19th and early 20th centuries, a banknote was a promise: hand it in, and you could redeem it for a fixed quantity of gold.

After the Second World War, the Bretton Woods system tied major currencies to the U.S. dollar, which was in turn convertible to gold. Then, on 15 August 1971, U.S. President Richard Nixon suspended the dollar's convertibility into gold, an event known as the "Nixon Shock." From that point on, the world ran on fiat money.

The word "fiat" comes from Latin for "let it be done"

This means that our society literally reached an agreement that defined value objects as money. From this perspective, money is a philosophical construction.

The value of a fiat is a combination of factors: the state declares it legal tender, requires that taxes be paid in it, and, most importantly, that society collectively trusts and accepts it. In other words, modern money is not backed by a thing. It is backed by law, by the credibility of a central bank, and by shared belief.

This is the point most critics of Bitcoin quietly skip over. The historian Yuval Noah Harari, in Sapiens: A Brief History of Humankind, argues that money is fundamentally a story we all agree to believe. He calls it "the most universal and most efficient system of mutual trust ever devised".

By that logic, all money is basically backed by nothing. In this case, the question is not if Bitcoin rests on belief, because all money does, but whose belief, and how durable it is.

So What Actually Backs Bitcoin?

After introducing Bitcoin, Nakamoto was explicit about the motivation. In a February 2009 forum post, he wrote that the root problem with conventional currency is all the trust it requires, and that "the history of fiat currencies is full of breaches of that trust".

Bitcoin's promise, laid out in the white paper, was a system for transactions "without relying on trust" in any central intermediary.

So what stands behind a Bitcoin?

Not a physical asset but software and mathematics:

• Absolute scarcity. The protocol caps the total supply at 21 million coins, forever. Unlike a central bank, no one can print more. This is the feature most often compared to gold.
• Decentralization. No company, country, or person controls the network. It is maintained by thousands of independent computers ("nodes") worldwide.
• Security through proof-of-work. New transactions are validated by "miners" who expend enormous computing power and energy, making the ledger extraordinarily expensive to attack or falsify.
• A network of believers. Ultimately, Bitcoin is worth what a global community of users agrees it is worth, the same social consensus that underpins the dollar, only without a state to enforce it.

Read more: What Happens When All Bitcoins Are Mined

Skeptics reply that mathematics and electricity aren’t the same as value, and that a shared belief with no legal backstop can evaporate.

The Experts: A Debate Across Every Camp

The builders: creators and crypto advocates

For the builders, belief backed by working code is enough.

To Bitcoin's architects, the absence of physical backing is the entire point: it's a feature, not a bug. Nakamoto designed the system precisely so that users wouldn’t have to trust banks or governments.

The educator Andreas Antonopoulos, author of Mastering Bitcoin and The Internet of Money, reframes the question of backing entirely. He describes Bitcoin as "network-centric money," a system where trust in institutions is replaced by trust in a decentralized network that no one controls. In his telling, the value is not in an underlying asset, but in the protocol itself, in the same way the internet's value lies in its network, not in any single server.

Even Vitalik Buterin, co-founder of Ethereum and a sometime critic of Bitcoin maximalism, illustrates the logic of conviction-as-backing: he has said he wouldn’t hold roughly 90% of his net worth in ether if he didn’t believe in it as a store of value.

Wall Street's converts: the bulls

Legendary macro trader Paul Tudor Jones was among the first on Wall Street to break ranks. In a May 2020 investor letter titled The Great Monetary Inflation, written as central banks flooded the world with money during the pandemic, he framed Bitcoin as a bet against currency debasement, arguing that the best strategy was to "own the fastest horse". He explicitly compared the moment to gold in the 1970s.

No conversion is more consequential than that of Larry Fink, CEO of BlackRock, the world's largest asset manager. In 2017, he dismissed Bitcoin as "an index of money laundering." By 2024–2025, after BlackRock launched a wildly successful spot Bitcoin ETF, Fink had reversed course, describing the asset as "digital gold" and telling audiences that cryptocurrencies serve the same purpose as gold: a store of value. Fink now frames Bitcoin as a hedge against currency instability and sovereign debt.

And then there is Michael Saylor, executive chairman of Strategy (formerly MicroStrategy), the corporate world's most relentless Bitcoin accumulator, who markets Bitcoin as "digital gold" and even "digital energy," predicting that just as the world once ran on gold-backed credit, it will run on digital-gold-backed credit for centuries to come.

Wall Street's skeptics: the bears

Against them stand some of the most respected names in traditional investing, who see exactly the lack of intrinsic value as fatal.

Warren Buffett, chairman of Berkshire Hathaway, delivered the most quoted line in the entire debate at his 2018 shareholder meeting, calling Bitcoin "probably rat poison squared". His core objection is philosophical: Bitcoin produces nothing: no earnings, no dividends, no crops, no rent, so, in his view, it cannot be a productive investment.

His late partner Charlie Munger was blunter still, describing crypto trading as "just dementia" at that same meeting and later calling Bitcoin "stupid and evil." He argued it undermines the financial system and should be banned.

Jamie Dimon, CEO of JPMorgan Chase, has been remarkably consistent since 2017, when he called Bitcoin a "fraud" worse than the Dutch tulip mania. In a 2024 Bloomberg interview, he doubled down, dismissing it as a "Ponzi scheme" with no intrinsic value. Tellingly, Dimon draws a line between Bitcoin, which he disdains, and the underlying blockchain technology, which JPMorgan itself uses.

The economists and philosophers

The most interesting point is that academic economics has produced Bitcoin's fiercest intellectual critics.

Nouriel Roubini, the NYU economist who foresaw the 2008 crash, took the argument to the U.S. Congress. In sworn testimony before the Senate Banking Committee on 11 October 2018, he called crypto "the mother of all scams and bubbles" and dismissed blockchain as no better than a spreadsheet.

Perhaps the most instructive case is that of Nassim Nicholas Taleb, the risk analyst and author of The Black Swan, because he argued all the sides. In 2017 he was sympathetic, even writing a foreword praising Bitcoin as an experiment in currency free of government. By 2021 he had reversed hard. In a widely circulated paper, Bitcoin, Currencies, and Bubbles, he concluded that Bitcoin's value is "worth exactly zero," failing as both a currency and a hedge. On CNBC, he added that there is no reason it should be linked to anything in the economy.

Why Did Bitcoin Actually Become Popular?

The quick answer: several forces converged. The long one is:

1. Bitcoin was born from a crisis of trust, when bank bailouts and money-printing shook public faith in the financial establishment. For people who felt the system was rigged, an asset explicitly designed to need no banks was not a bug.

2. The inflation-hedge story. As governments expanded the money supply dramatically, especially during the pandemic, Bitcoin's fixed supply attracted investors who feared currency debasement. Whether or not it works perfectly as a hedge, the narrative drove enormous demand.

3. Spectacular returns and speculation. It would be naive to ignore the obvious: Bitcoin made early adopters extraordinarily rich, and the fear of missing out pulled in waves of new buyers.

4. Network effects and ideology. Every new user, merchant, developer, and dollar of liquidity makes the network more useful and harder to displace, the same self-reinforcing dynamic that entrenched the internet. Layered on top is a genuine ideological movement around financial self-sovereignty, championed by educators like Antonopoulos and, at the national level, for example, by El Salvador's decision to adopt Bitcoin as legal tender.

5. Accessibility. For the roughly two billion people with limited access to banking, a global money system reachable with only a smartphone has an appeal that residents of wealthy, stable economies can easily underestimate.

Conclusion: Backed by Belief, Like Everything Else

Since 1971, no major currency has been backed by a physical commodity. The dollar is backed by the taxing power and credibility of the U.S. government and by the collective agreement to accept it; gold is backed by several thousand years of humans deciding it is precious. Money, as Harari puts it, has always been a system of shared belief.

Bitcoin's radical proposal is to replace the state and the bank at the center of that belief with mathematics, fixed rules, and a decentralized network. To its champions, that is a more trustworthy anchor than a central bank that can debase a currency at will. To its critics, it is a speculative story with no floor, valuable only as long as the next buyer believes.