Is Bitcoin Still Doing What It Was Supposed to Do?
Bitcoin was originally presented as several things:
Peer-to-peer electronic cash
A hedge against monetary debasement
A store of value outside the “system”
A hedge against inflation
Market Wizard, Lance Breitstein, none of those have been true based on the price action.
Z, a Former Wall Street professional, echos the same sentiment.
The critiques from Breitstein and Z cut to the heart of Bitcoin’s existential problem: every original investment thesis has failed empirically when tested against actual price action.
Let’s examine each pillar of the Bitcoin narrative and how it has collapsed:
1. Peer-to-Peer Electronic Cash
Original Promise: Decentralized payments without intermediaries.
Reality: Bitcoin has become completely unusable as currency due to:
Transaction fees that make small purchases uneconomical
Settlement times measured in hours during network congestion
Volatility that makes pricing goods impossible
Zero merchant adoption at scale.
2. Hedge Against Monetary Debasement
This is the biggest failure given current conditions.
We’re living through exactly the scenario Bitcoin was designed for:
Fed balance sheet exploded from $4T to $9T
M2 money supply increased 40% in two years
Bitcoin’s response? It’s down. During the precise moment of maximum dollar debasement fears, Bitcoin has crashed.
3. Store of Value / “Digital Gold”
Original Promise: Preserve wealth outside the traditional system.
Reality: Bitcoin has proven to be:
More correlated to NASDAQ than to gold
Subject to the same liquidation cascades as speculative assets
Heavily influenced by Fed policy and rate expectations
Gold is up during recent dollar weakness. Bitcoin is down. This is embarrassing for Bitcoin bros.
4. Inflation Hedge
The data is unambiguous here:
During the 2021-2022 inflation surge (CPI hitting 9%), Bitcoin crashed from $69K to $16K—a 77% drawdown. It moved inversely to inflation, exactly opposite of its purported role.
Meanwhile, gold, commodities, and energy stocks did what inflation hedges are supposed to do.
So What’s Left?
Breitstein asks the critical question: “What exactly is the remaining investment argument for Bitcoin, if not just greater fool speculation?”
The Remaining Arguments
“It’s survived 15 years, therefore it will survive forever.”
This is circular reasoning. Survival doesn’t validate utility.
Pets.com survived for years too.
Institutional Adoption Narrative “BlackRock and institutions are buying, legitimizing it.”
ETF flows have been positive, yet price is down
Institutions also bought mortgage-backed securities in 2007
What Bitcoin has become is clear: a speculative asset whose price is determined entirely by future buyer expectations, with no cash flows, no dividends, no productive use, and increasingly questionable narrative support.
Z’s question is devastating in its simplicity: “Is Bitcoin doing what it was supposed to do?”
The answer across every dimension is no.