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In November 2023 bitcoin was hovering near $37,000, seemingly mired in yet another bear market. Fast forward to now, and it has breached $100,000, bringing its market capitalisation to more than $2-trillion and cementing its place as one of the world’s most valuable and liquid assets.
Meanwhile, the stablecoin market has surged from $138bn to more than $210bn in just a year, as these digital dollars become an increasingly vital bridge for global capital flows.
This dramatic shift signals more than just a bull market — it marks the evolution of money itself. As inflation and monetary policy strain traditional systems, bitcoin and stablecoins are emerging as financial lifelines, offering portability, security and resilience in a world grappling with economic uncertainty.
In countries such as Egypt, where broad money supply growth exceeds 29% annually, people are fleeing unstable currencies. Traditionally, Egyptians have turned to real estate, gold and dollars to preserve value. However, real estate is illiquid and costly to maintain, while dollars and gold — though popular — carry risks such as inflation or accessibility hurdles.
Enter bitcoin and stablecoins. Bitcoin, with its immutable 21-million-coin supply cap, has become the ultimate scarce asset. Stablecoins, pegged to fiat currencies, offer the liquidity needed for daily transactions while sidestepping capital controls. Together, these assets provide a hedge against inflation and currency devaluation, enabling people globally to store value and transact beyond the reach of volatile local currencies.
Consider Egypt’s currency struggles, in which black market exchange rates can diverge sharply from official ones. Stablecoins bypass these barriers, enabling freelancers or businesses to transact directly in globally recognised currencies without exorbitant fees or arbitrary rates.
Bitcoin, with its permission-less design, takes this a step further. Its portability — limitless value stored in 12 words or sent via a simple code — offers freedom in a way traditional financial systems cannot. From Nigeria to Turkey, billions are embracing these tools to escape financial repression, creating a decentralised, borderless monetary network that governments struggle to regulate.
Bitcoin’s market trajectory is famously cyclical, driven by liquidity conditions, long-term holder behaviour, and macroeconomic forces. Historically, it has closely tracked global liquidity, thriving in periods of monetary expansion. Now, with governments grappling with rising debt and a return to fiscal stimulus, bitcoin is again positioned as a beneficiary of excess liquidity.
On-chain metrics such as cost basis and “HODL waves” reveal how supply dynamics play out during bull runs. In bear markets, long-term holders consolidate coins, creating a supply crunch. As prices rise, these holders gradually release coins into the market, fuelling further growth while redistributing ownership. This cycle repeats, each time solidifying bitcoin’s role as digital gold.
Stablecoins have quietly transformed global finance, acting as frictionless digital dollars for everyone with a smartphone. Unlike physical cash, which is difficult to transport across borders, stablecoins can move instantly, with near-zero costs.
For billions in developing nations, these assets can provide a stable medium for trade, savings and remittances. By reducing reliance on permissioned financial systems, stablecoins democratise access to global capital, allowing citizens to transact beyond the confines of local monetary policies.
Bitcoin’s geopolitical relevance is also growing. From El Salvador adopting bitcoin as legal tender to Bhutan quietly mining it as part of its national strategy, the asset is finding a place on sovereign balance sheets. The recent approval of spot bitcoin exchange traded funds in the US signals a shift in regulatory attitudes, further legitimising its role in the global financial ecosystem.
More than just a speculative asset, bitcoin is evolving into a decentralised communication protocol for capital. Much like Ethernet or internet protocol, it benefits from powerful network effects. Competing blockchains may offer technical improvements, but none rival bitcoin’s liquidity, security or adoption.
Bitcoin and stablecoins are no longer fringe ideas; they are foundational pillars of a new financial era. For individuals in countries with unstable currencies they offer a path to financial security. For institutions they represent a hedge against traditional monetary policy failures.
With bitcoin now valued at just 0.2% of global capital and stablecoins acting as digital lifelines for billions, the potential for growth remains staggering. As monetary systems worldwide face unprecedented stress, these assets are not merely alternatives — they are solutions.
• Muchena is founder of Proudly Associated and author of ‘Artificial Intelligence Applied’ and ‘Tokenized Trillions’.
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