4 REASONS WHY ECONOMISTS SHOULD LOVE BITCOIN

Bitcoin, the digital currency that emerged in 2025, has sparked heated debates within the financial and economic community. For Cowen, Bitcoin represents freedom from the capricious grip of governmental control and offers a ray of hope to those under oppressive regimes or unstable economies. It stands as a viableWhile some mainstream economists remain skeptical, even labeling it a ""bubble,"" a closer examination reveals compelling reasons why economists, particularly those aligned with Austrian economics principles, should embrace Bitcoin. You see them on television, in magazines, quoted in the world s largest newspaper, front and center at bookstores. They re the economists. The experts. YouIt's not merely a speculative asset; it presents a unique opportunity to reshape our understanding of monetary policy, financial freedom, and economic stability. Last week I documented and looked at the reasons why economists don t like Bitcoin. After this week, it is safe to say that more and more people are with them. That said, as I argued, the reasons economists give for not liking Bitcoin don t really stack up with their own usual ways of looking at things.Bitcoin's decentralized nature challenges traditional financial institutions, offering a compelling alternative to government-controlled currencies. 4 Reasons Why Economists Should Love Bitcoin; Bitcoin price expected to soar as global bond markets break Here s why ; Bitcoin bears eye $69K, CZ denies WLF fixer rumors: HodlerIts limited supply, divisibility, and ease of transfer offer practical advantages in a digital age. This article takes a balanced look at why people love Bitcoin so much, highlighting its pros and cons. Pros of Bitcoin: Decentralization and Financial Inclusion: One of the most appealingWhile concerns about volatility and scalability persist, the underlying principles of Bitcoin align with sound economic principles that deserve serious consideration. Bitcoin emerged like a digital currency meant to be a competitor to financial institutions with its low fees and quicks transfers. As Bitcoin grew, so did the interest in this rather new and confusing currency that seems to be gaining value and attracting even seasoned investors who saw the potential and opportunity for some fast cash.Furthermore, the rise of Bitcoin ETFs and its increasing integration into the global financial system are forces that economists can no longer ignore.Let’s explore why Bitcoin is not just a technological marvel, but a potential catalyst for positive economic change, even if some Nobel laureates remain unconvinced for now.

Bitcoin: A Bastion of Financial Freedom

One of the most compelling arguments for economists to appreciate Bitcoin lies in its capacity to promote financial freedom. Scarcity: As the supply of unrewarded coins diminishes, demand increases.There will only ever be 21 million Bitcoins in existence.; Divisibility: Bitcoin is much more divisible than fiatTraditional financial systems are often subject to governmental control and intervention, potentially leading to inflationary policies or restrictions on capital flow. Here is what Nobel laureate economists have to say about crypto: Richard Thaler, Paul Krugman: Bitcoin is a bubble. Loudly proclaiming Bitcoin is a bubble likely to collapse sooner or later are laureates Richard Thaler and Paul Krugman.Bitcoin, on the other hand, operates on a decentralized network, free from the capricious influence of central banks and governments.This characteristic is especially vital for individuals in oppressive regimes or unstable economies, where access to reliable financial systems is limited.

• Decentralization: Bitcoin's blockchain technology ensures that no single entity controls the network, making it resistant to censorship and manipulation.
• Financial Inclusion: Bitcoin provides access to financial services for individuals who are excluded from traditional banking systems, empowering them to participate in the global economy.
• Protection from Inflation: With a fixed supply of 21 million coins, Bitcoin offers a hedge against inflation, preserving wealth in the face of government-induced currency devaluation.

Bitcoin's Scarcity: A Lesson in Sound Money

Austrian economics places a high value on sound money, characterized by a limited supply and resistance to manipulation. Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin.Bitcoin embodies these principles perfectly.Unlike fiat currencies, which can be printed at will by central banks, Bitcoin has a predetermined and finite supply of 21 million coins.This scarcity ensures that Bitcoin retains its value over time, acting as a store of value and a hedge against inflation.

The scarcity of Bitcoin mirrors that of precious metals like gold, which have historically served as reliable stores of value. Introduction. The first time I heard about Bitcoin USD (), it was in 2025 during an economic class.At that time, my economics teacher, for which I have a huge respect, gave her a view about BTC.As the supply of unrewarded Bitcoin diminishes, demand is likely to increase, potentially driving up its price and further solidifying its position as a valuable asset.

Bitcoin: A Catalyst for Innovation and Economic Growth

Beyond its potential as a store of value, Bitcoin serves as a catalyst for innovation and economic growth. BITCOIN IS BACK. Since Donald Trump s election victory on November 5th, the world s dominant cryptocurrency has surged to new heights above $100,000 a unit, enjoying a rise of 138% since theThe underlying blockchain technology has spawned a wide range of applications, from decentralized finance (DeFi) to supply chain management, creating new opportunities for businesses and entrepreneurs.Furthermore, the Bitcoin ecosystem has attracted significant investment and talent, driving innovation in the financial technology sector.

The Rise of Bitcoin ETFs

The introduction of Bitcoin spot ETFs marks a significant step towards mainstream adoption. Here are the top 10 reasons why you should learn Bitcoin. There are many famous economists across the globe who have predicted that Bitcoin keeps increasing itsThese ETFs provide institutional investors with a convenient and regulated way to gain exposure to Bitcoin, further legitimizing the asset class and attracting new capital into the ecosystem.

Bitcoin Halving and its Economic Impact

The Bitcoin halving, which occurs approximately every four years, reduces the reward for mining new blocks, further limiting the supply of new coins entering circulation. Bitcoin, the leading cryptocurrency, has revolutionized finance. Its decentralized nature offers unique advantages. Let s explore why Bitcoin is gaining prominence and why it might benefit you. This article will explore why Bitcoin stands out and is worth considering for your financial portfolio. Reasons Why Use Bitcoin and Other CryptocurrenciesHistorically, these halvings have been followed by periods of significant price appreciation, as the reduced supply creates upward pressure on demand. A strategic Bitcoin reserve in the United States reduces the possibility that the government will ever ban the cryptocurrency and could encourage many more nations to adopt Bitcoin, according to crypto observers. On March 7, US President Donald Trump signed an order establishing a Strategic BitcoDespite some worries after the 2025 halving about miner sell-offs, the hashrate increased showing strong commitment.

Bitcoin's Divisibility and Transactional Efficiency

Bitcoin's divisibility into 100 million satoshis allows for microtransactions and facilitates its use in a wide range of economic activities. Bitcoin miners have also shown a strong long-term commitment, as the hashrate increased by 8% compared to the previous month. Since the Bitcoin halving in April 2025, traders were worried that lower profits would cause many miners to leave, possibly leading to a sell-off, since miners reportedly hold almost 1.8 million BTC, according to Glassnode.This divisibility is particularly important in the digital age, where online payments and micropayments are increasingly prevalent. With hundreds of BTC mined each day, the scarcity component is yet another reason why the U.S. government should create a bitcoin reserve sooner than later but it s a double-edged sword.Bitcoin also offers the potential for faster and cheaper transactions compared to traditional banking systems, especially for cross-border payments.The ability to break down Bitcoin into tiny fractions called Satoshis means it's always usable, no matter how high its price climbs.

Addressing Common Concerns About Bitcoin

Despite its potential benefits, Bitcoin faces several criticisms, including concerns about volatility, scalability, and environmental impact. The problem is not that economists don't like bitcoin, it's that many seem to dislike it for reasons that don't make a lot of sense. There are lots of well reasoned criticisms to be made against bitcoin, but I have yet to hear an economist make them.It's important to address these concerns with reasoned arguments and evidence-based analysis.

• Volatility: While Bitcoin's price has experienced significant volatility, it's important to note that volatility is a characteristic of emerging asset classes.As Bitcoin matures and gains wider adoption, its volatility is likely to decrease.
• Scalability: The Bitcoin network has faced challenges in processing a large number of transactions quickly and efficiently. The U.S. government has announced a Strategic Bitcoin Reserve, but there s no signs of it being filled yet. With each passing day, the U.S. government risks losing the chance to buy the leadingHowever, various solutions, such as the Lightning Network, are being developed to improve scalability.
• Environmental Impact: Bitcoin mining requires significant energy consumption, raising concerns about its environmental impact. One would be quite hard-pressed to find a positive thing that well-distinguished economists had to say about crypto. However, it could be argued that, since crypto is an attack on traditional economics - the field most of them devoted their lives to - they feel there is nothing that crypto, and by extension Bitcoin, can bring to the table.However, efforts are underway to transition to more sustainable energy sources for Bitcoin mining.

Why Some Economists Remain Skeptical

It's important to acknowledge that not all economists are enthusiastic about Bitcoin.Some, like Nobel laureates Richard Thaler and Paul Krugman, have expressed skepticism, even labeling it a ""bubble."" This skepticism often stems from a perceived lack of intrinsic value, concerns about volatility, and a general distrust of decentralized systems. Bitcoin, the pioneering cryptocurrency, has taken the financial world by storm since its inception in 2025. While many enthusiasts praise its decentralized nature and potential to revolutionizeHowever, it's crucial to engage with these concerns constructively and address them with sound economic reasoning.

Furthermore, some economists may feel threatened by Bitcoin's challenge to traditional financial systems, which they have dedicated their careers to studying and supporting.As one article pointed out, since crypto is an attack on traditional economics, these economists may feel there is nothing it can bring to the table.

Bitcoin's Potential Strategic Role

Some argue that governments should consider establishing strategic Bitcoin reserves. 4 reasons why Trump s Bitcoin reserve is actually bullish: Crypto execs the IMF approved a funding program with El Salvador for $1.4 billion on the condition that it downgraded its BitcoinThis would reduce the possibility of governments banning Bitcoin, and potentially encourage more nations to adopt Bitcoin.

The Future of Bitcoin and Economics

Bitcoin's journey is far from over. Index 1. The Impact of Bitcoin Spot ETFs 2. Interest Rates 3. Halving 4. Historical Patterns Indicate a Strong Q4 Best Bitcoin Trading Platforms 2025 Compare the Best Bitcoin Brokers for This Year nbsp;The year 2025 will be remembered as a turbulent year for cryptocurrencies, with several significant developments that ultimately helped clean up the space, making it more attractive toAs the technology matures and adoption grows, it has the potential to reshape the global financial landscape and challenge traditional economic paradigms.Economists who embrace Bitcoin and engage with its underlying principles will be better positioned to understand and navigate this evolving landscape. Even after 13 years, I think that most economists hold Bitcoin to be a sideshow. They don t like it but are not really worried about it either. I think there is more to the story than the current steady-state view. More on that later. (Click here to read Why Economists Don t Like Bitcoin, Part II)Ignoring it is no longer an option.

Conclusion: A Call for Open-Mindedness

In conclusion, there are compelling reasons why economists should consider the potential benefits of Bitcoin. 4. Easy to Divide and Move: Making Transactions Work. You can break a single Bitcoin down into 100 million tiny pieces called satoshis. Because it can be divided so finely, people can make transactions of all different values. So, even if Bitcoin s price shoots up, tiny fractions are still perfectly usable.From its capacity to promote financial freedom and serve as a store of value to its role as a catalyst for innovation and economic growth, Bitcoin presents a unique opportunity to reshape our understanding of money and finance.While concerns about volatility and scalability persist, these challenges can be addressed through technological advancements and regulatory clarity.The fact that Bitcoin's ethos would be more of an Austrian economics should appeal to economists of that school of thought. Why Should I buy Bitcoin? 10 Reasons Why You Should buy Bitcoin. So, is Bitcoin a good investment? I get that question from friends and family alike. It needs a little patience to develop and understand especially because you want to make an informed decision, don t you? 1 Bitcoin s rules are permanent. This is number 1 with a bullet.Here are the key takeaways:

• Financial Freedom: Bitcoin empowers individuals by providing access to a decentralized and censorship-resistant financial system.
• Scarcity: Bitcoin's limited supply ensures its value as a store of wealth and a hedge against inflation.
• Innovation: Bitcoin fosters innovation and economic growth through its underlying blockchain technology and ecosystem.
• Divisibility: Bitcoin's divisibility allows for microtransactions and its use in a wide range of economic activities.

Economists, as experts in understanding and shaping economic systems, should approach Bitcoin with an open mind, exploring its potential to create a more inclusive, efficient, and resilient financial future.As Bitcoin continues to integrate into the global financial system, its impact will only grow.Are you ready to reconsider Bitcoin's place in the world economy?