An Act of Faith: Bitcoin and the Speculative Bubble

Cryptocurrencies are an ‘act of faith’, lacking tangible evidence of any physical presence. There are just over 19.4 million (2024) Bitcoins in circulation.

Of the total supply of 21 million Bitcoin tokens, 92.44% are already in circulation. Often labelled as a ‘speculative bubble’, Bitcoin is a high-risk digital asset that can circulate without the centralised authority of a bank or government. It continues to endure a consistent lack of support from mainstream economic dialogue.

2017 was a watershed year for ‘virtual currencies’, as Japan was the first country to support Bitcoin, allowing it to become a legal form of payment. Despite Western doubt, in Tokyo, a cult-like following of believers were at the forefront of creating both a social and aesthetic element to Bitcoin, bridging the void of human experience that continues, contributing to its erratic market behaviour. When this project was completed in 2017, Bitcoin was worth around $900; by the following year, it had risen to over $13,000. At its peak in November 2021, one Bitcoin was worth over $60,000.

Although an act once possible by committed and capable individuals, the process of mining Bitcoin became ever more complex and energy-consuming as its market life continued. The result was an increasing influence of dedicated businesses and corporate powers, whose collective resources allowed the production process to be expanded, often relocating into purpose-built mining farms. One such company in 2012, Genesis Mining (which is no longer trading), chose to house their facilities in Iceland, which, much like Bitcoin, has a dynamic and highly volatile landscape, containing an invaluable abundance of cheap, geothermal energy that can support the hugely consumptive process of mining.