Is Bitcoin Backed by Nothing?

Is Bitcoin Backed by Nothing? The Answer Will Surprise You

When the Founding Fathers of our nation penned the Declaration of Independence, there was nothing backing it.

It was just a collection of words on paper. A group of stated intentions acting as a shared value system that an entire nation would be built upon.

Shared beliefs are what create nations. And it’s shared beliefs that create enduring monetary systems.

Here’s the thing…

When attacked, strong nations, strong belief systems, and strong currencies emerge even stronger.

The U.S. Constitution is a perfect example.

It’s faced all kinds of challenges, stressors and attacks over its 235-year history – including a Civil War, Great Depression, two World Wars, and all types of internal strife and division.

Yet it remains the oldest and longest-standing written and codified national constitution in force in the world.

This type of resiliency is called “antifragility.”

Just look at bitcoin’s recent history…

In 2013, the Chinese government banned its banks from dealing with bitcoin. This was at a time when 75% of all bitcoin mining and the majority of bitcoin activity took place in China.

On top of that, hackers broke into the world’s largest bitcoin exchange at the time (Mt. Gox) and stole nearly 850,000 bitcoin.

Bitcoin dropped 80%… But it still refused to die. In fact, it got even stronger, rocketing from a low of $175 in 2015 to a high of $20,000 in 2017.

In 2017, China tried to ban crypto exchanges in the country, causing a 21% fall in bitcoin’s price. And in 2021, China’s ban on bitcoin mining crackdown caused the crypto’s price to drop as much 50% from its all-time high of $64,863.

At the end of 2022, we saw a number of scandals involving some of the biggest crypto players in the world, including the collapse of FTX, Celsius and Voyager. Combined, they had over 5 million users.

The carnage caused extreme panic in crypto. Bitcoin dropped as low as $16,000 in 2023. Today, even amid the recent volatility caused by fears of selling from people receiving their Mt. Gox claims and the German and US governments bitcoin sales, bitcoin sits at $54,000.

Here’s why I’m telling you this…

A lot of people believe bitcoin is backed by nothing.

For instance, in June 2021 prominent Cornell University economics professor Eswar Prasad wrote a essay in the New York Times claiming bitcoin, “has no intrinsic value and is not backed by anything”

I’m telling you that belief is dead wrong… And below, I’ll show you why.

What Backs Bitcoin