Bitcoin began its history back in the distant 2008–2009. During this time, it managed to transform from an obscure digital currency that was once used to buy pizza into a highly liquid asset. Although the basic principles of Bitcoin have remained the same, its price has changed dramatically during this period.

Just a year ago, in October 2025, one BTC was worth about $126,080. And a year later, at the end of October 2026, its price fell by almost 36% — to $81,000. Such “ups and downs” are an interesting phenomenon for me as the CEO of a crypto aggregator. Bitcoin became the starting point for the development of the modern crypto industry, and its price movements influence the mood and dynamics of the entire market.

In this article, I’ll look beyond the price chart to explore what gives Bitcoin its value, what drives demand for BTC, and why its role in the crypto market goes far beyond its latest price movements.

• Figure 1. Bitcoin prices, October 1, 2025 to October 28, 2026. Source: CoinGecko BTC/USD data.

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Value and price answer different questions

The value of Bitcoin is an individual story. For example, two different people may explain what it consists of in different ways. Someone doesn’t want to use traditional banks for payments or transfers and therefore uses Bitcoin. For another person, it’s more important to have a “reliable” crypto asset with a history and limited supply in their crypto portfolio. These cases are small illustrations of how Bitcoin can be used and what it’s valued for.

But value and price are different things. The quoted price is just the price that the buyer and seller come to in each individual trade. One seller takes what the buyer offers, and the next trade may be at a different price. There is no hidden agreed value in dollars behind the quote that you're meant to be able to work out.

Thus, it is more difficult to evaluate Bitcoin than a traditional financial asset. Unlike stocks, Bitcoin does not entitle you to any future earnings of a company, nor are there any future cash flows that can be used to determine its value. According to Fidelity, crypto valuation is all about supply and demand. However, that doesn't provide a clear 'fair value' figure.

What supports Bitcoin's value

1. Predictable issuance

Since 2012, Bitcoin has undergone a halving approximately every four years, reducing the block subsidy by 50% every 210,000 blocks. Following the April 2024 halving, the subsidy fell to 3.125 BTC per block, down from the initial 50 BTC.

What does this tell us? Bitcoin has a capped supply of approximately 21 million coins, while the rate of new BTC issuance declines with each halving. However, as Eswar Prasad argues in his article, The Brutal Truth About Bitcoin, scarcity alone is unlikely to be a sufficient source of value. I agree with this view.

In my opinion, a more significant feature is the predictability of Bitcoin’s issuance schedule. The block subsidy is determined by the protocol rules and block height, rather than by the discretionary decisions of a centralized issuer. Anyone considering buying BTC can examine these rules to understand how the issuance of new coins is expected to change over time.

This allows you to take halving into account when assessing the market, but it doesn’t allow you to predict price movements. A reduction in the rate of new BTC issuance alone doesn’t guarantee an increase in Bitcoin’s value: much depends on demand and other market factors. Therefore, when making a decision to buy, it’s important to consider not only the issuance rate but also the possible risks.

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  Figure 2. Bitcoin block subsidy by issuance era (2009 to April 2024). BTC per block (excluding transaction fees). Sources: Bitcoin Core and CoinMarketCap halving history.

2. Decentralization and сontrol

The Bitcoin blockchain is designed so that transactions and blocks are independently verified by network participants. Miners use Proof of Work to propose new blocks, while full nodes check whether those blocks comply with Bitcoin’s protocol rules. Proof of Work makes it costly to rewrite transaction history, which helps protect the integrity of the network and makes it reliable for transferring value.

This differs from Arbitrum, which has a different governance structure. Its Security Council has specific emergency powers that allow it to intervene in the network, as demonstrated by the recent case in which it moved ~30,766 ETH held by the KelpDAO to a frozen address. Bitcoin has no equivalent council with the authority to carry out such an intervention.

For me, the important distinction is that Bitcoin’s rules are independently enforced by network participants rather than by a central authority. Each participant can verify the rules for themselves, but no single participant can unilaterally control the entire network.

3. Infrastructure and liquidity

Why do we need money if you can’t buy anything with it? The same goes for Bitcoin. Since its inception, an infrastructure has gradually formed around BTC that allows you not only to store it, but also to buy, sell, and use it for transfers and payments. For example:

• In 2010, BitcoinMarket offered BTC trading in dollars.
• March 2018 saw Lightning Labs launch the first mainnet beta of their LND for Lightning Network payments.
• In January 2024, the US SEC approved spot Bitcoin ETP shares, providing investors with another regulated route to exposure. Glassnode's US spot Bitcoin ETF balance data shows these funds held circa 650k BTC in January 2024 and 1.29m BTC by October 2026 (a nearly 98% increase).

Of course, as a result, Bitcoin has become much more accessible through exchanges, payment systems, and regulated investment products. But I want to emphasize one important thing: a well-developed trading infrastructure does not guarantee that you will be able to buy or sell Bitcoin at the stated market price on any platform. The market quote and the price at which a transaction is actually executed on a specific exchange or exchange service are not the same thing. Liquidity depends on the size of the transaction, market depth, the specific platform, and current market conditions.

Is the ‘Digital gold’ argument reasonable?

Bitcoin is often compared to gold. For instance, Larry Fink, CEO of BlackRock, has described Bitcoin as a way of “digitizing gold.” The arguments in favor of this comparison tend to echo the points I mentioned above. Binance Academy sums them up by pointing to Bitcoin’s scarcity, portability, and divisibility. I think gold works well as a metaphor for explaining Bitcoin’s value, rather than its price, to someone outside the crypto industry.

But when it comes to price, the comparison becomes more complicated. Gold has a much longer history as a store of value. In an August 2024 analysis, the World Gold Council highlighted the difference in price volatility: Bitcoin’s annualized volatility was around 60%, compared with approximately 15% for gold. These figures were based on daily returns in US dollars from December 31, 2018, to December 31, 2023.

Why the price moves faster than the network

A coin mined years ago can come onto the market today, that’s why the supply of BTC on the market depends not only on the issuance of new coins but also on the decisions of current holders. You can sell the BTC you bought in an earlier cycle, or you can simply hold on to it.

That is precisely why we should not attribute the price increase solely to the halving, since the schedule only answers some of the questions. While we can anticipate changes in issuance volume, we cannot predict how many holders will sell their coins during a price rally, nor how much money buyers will invest. But this isn’t the only factor influencing the movement of the BTC price. I would also highlight other historical events:

• Monetary policy has an impact on the cost of borrowing and the options available to those holding cash. In 2022, the Fed's target range went from 0–0.25% to 4.25–4.50%, and Bitcoin lost 64.2% (CoinGecko annual report). In other words, 2022 seems to disprove the notion that Bitcoin is immune to the influence of the traditional financial system. We can't actually say how much of that loss was attributable to Fed policy.
• Access can also be had via the regulator's own decision. When the SEC approved the 2024 ETP listings, they explicitly didn't endorse Bitcoin. A product could be sold through that route without the regulator having to certify that Bitcoin was fairly priced. I'd be very wary of treating regulatory access as a guarantee as to what you should pay.
• A trader using leverage can control a position which is larger than their own capital. If their collateral is insufficient, then the position may be liquidated. Amberdata's October 2025 crash analysis looks at exactly what happens when a string of forced trades hit a thin book with wide spreads.

These examples show why Bitcoin's predictable supply schedule is only one part of the picture. Its market price also reflects monetary conditions, regulatory developments, and trading activity.

What exactly historical episodes show

2017 and 2018 showed the limits of access

The futures launch gave the traders another tool. It didn't in any way give the holders protection against a reversal. I wouldn't blame the subsequent fall on the CME simply because it came after the launch.

2022 combined tighter money with counterparty failures

Terra and FTX are in any account or story about 2022 (alongside the rise in interest rates). CoinGecko's annual review goes into detail about how the collapse of both of those businesses had a knock-on effect for others.

For Bitcoin holders, dependence on a custodian or a borrower of coins was a real problem. A company that was lending out your BTC was exposing those coins to the risk of the borrower failing to repay. The borrower was, of course, under an obligation to repay. That obligation wasn't just a function of the Bitcoin network producing valid blocks on the blockchain. That's why I draw a clear distinction between the security of the network and the reliability of a business that holds your coins.

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Figure 3. US federal funds target range for 2022 (annual daily series). Lower and upper limits, percent. Sources: Federal Reserve via FRED, DFEDTARL and DFEDTARU. This is a chart of policy timing, not a chart of a measured causal effect on Bitcoin.

2024 changed the channels through which demand arrived

In 2024, two things that were often mentioned in conjunction actually did quite different things.

The ETP approvals provided people with a new way to get exposure via securities, while they reduced the amount of new issuance. To treat them as one explanation for the year's return doesn't really explain how much of the buying was via the new channel.

To work that out, you'd look at fund subscriptions and redemptions. A higher AUM figure isn't necessarily indicative of new money having come in from investors. The AUM could be higher simply because the BTC that the fund already holds has gone up in value.

October 2025 exposed the speed of forced repricing

Amberdata also looked at the orders that were sitting in the market during the October 2025 liquidations. With fewer orders and wider spreads, traders who were forced to exit their positions found themselves in much worse execution conditions. Selling into that market would have added to the fall.

The total in the table is for crypto positions (not just BTC), and it's not a measure of an equivalent amount of capital permanently withdrawn from BTC. I take it to be a measure of forced position closures over the period that Amberdata was looking at.

Quantum risk: a long-term challenge for Bitcoin

A more fundamental objection to Bitcoin is of course the risk to the cryptography that underpins ownership. If a holder no longer has confidence in that cryptography, then they have a reason to doubt the asset itself, irrespective of the current state of the market.

On 15th October 2026, Google Quantum AI reported a demonstration of magic state cultivation on its Willow processor. Magic state cultivation is a technique which produces the low-error quantum states required for fault-tolerant computation and could in principle reduce the amount of hardware required for some computations. Google notes that it still needs to demonstrate the technique at scale.

Google's research into crypto security involves machines that are powerful enough to break elliptic curve signatures, which authorise spending. This is the real threat, separate from the October lab result. Benzinga's report (as repeated by Yahoo Finance) clearly distinguished between a potential future vulnerability and an attack that could be carried out today. The hardware experiment did not demonstrate that Bitcoin had been cracked.

Before calling Bitcoin a good long-term investment, we need to understand how this risk will be managed. Quantum-resistant signatures would have to be in the network rules and in the wallet software, and people would have to adopt them. I wouldn’t simply assume that all users will join this initiative just because there is a financial incentive to protect the network.

My view on what makes Bitcoin valuable

It’s important to understand that it’s the first cryptocurrency, which laid the foundation for the development of the entire subsequent crypto industry. Today, smart contracts and decentralized applications are being developed on the basis of blockchain technologies.

But for me, the value of Bitcoin lies in something else as well. It’s important to me that the network isn’t controlled by a single organization or corporation, but operates on the basis of a decentralized protocol, the rules of which participants can verify independently.

Furthermore, Bitcoin is gaining increasing recognition from institutional investors and large businesses. It is no longer just some kind of internet coin, but an asset that has become part of the traditional financial system.

Bitcoin is also the first asset I look at when I want to get a sense of the crypto market's mood. It was the first crypto to achieve global prominence. A 2023 IMF working paper found an average return correlation of 0.52 between Bitcoin and the other crypto assets from Jan 2018 to Mar 2023. That doesn't mean every other asset moves in line with Bitcoin, of course, but it does give me a reason to use Bitcoin as a benchmark for market sentiment.

Author’s note: This article is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Digital assets and DeFi protocols involve significant risks, including loss of principal. Rates, liquidity, availability, and product terms may change, and access may be restricted by jurisdiction. Readers should conduct their own research and assess the applicable terms and risks before using any product or protocol.