Bitcoin’s recent price surge, reaching a record high, is largely driven by market sentiment and the belief in its scarcity as a hedge against inflation. The cryptocurrency’s value has soared by nearly 70% in the last month, outperforming almost all other assets in 2024. Enthusiasts attribute this to the economic design of Bitcoin, with a fixed supply of 21 million coins and a release schedule hardcoded into its software, which they believe will inevitably push its value up over time. However, economists like Silvia Dal Bianco from University College London argue that Bitcoin’s value is difficult to pin down due to its complex nature and the varying perceptions of what Bitcoin actually represents. The upcoming halving event, which cuts the production of new bitcoins by half, is also fueling speculation of further price increases. Nonetheless, without tangible fundamentals or real-world utility, Bitcoin’s price fluctuations are primarily a reflection of collective market psychology.
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