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How Bitcoin went from fringe experiment to institutional asset
Bitcoin spent years being dismissed as a scam. The shift came when people stopped asking what they could spend it on.
4 min watch · Industry & Adoption · Always free
Bitcoin is now held by governments, pension funds, major corporations and some of the largest asset managers in the world. The same asset spent years being written off as internet monopoly money. This entry is about how that distance got closed.
Two early objections come first, that Bitcoin is a Ponzi scheme and that it is mainly a tool for criminals, and neither survives a look at how Bitcoin actually works. After that comes the more interesting part, which is that the objections stopped carrying weight once people changed what they were asking Bitcoin to do. Where it goes from here is left open.
Transcriptlightly edited
From the fringes to the institutions
Hi, I'm Viv, and welcome to my notebook. Here's something I've been thinking about.
For years, Bitcoin sat on the fringes of the financial world. Today it's taken seriously by some of the biggest institutions within it. That transformation is worth looking at. This is one of the most fascinating shifts in modern financial history. Bitcoin has gone from being dismissed as internet monopoly money to being held by governments, major corporations, pension funds, and some of the largest asset managers in the world.
So how did this happen?
The questions people asked first
Well, imagine I said to you: I've invented internet money that isn't backed by anything, there's no government that controls it, and people solve mathematical puzzles to create it. You might ask, who guarantees it? What is it backed by? Where can you spend it? Couldn't someone just copy it? Isn't that just for criminals?
These are the types of questions that were being asked in the first few years of its release. There was a lot of confusion, and it's no wonder most people thought it was a scam or a Ponzi scheme.
But what is a Ponzi scheme? It has an organizer, it promises returns, money from new investors paying old investors. Bitcoin has none of these. There is no CEO, no company, no promised returns, no central operator.
Some people will say it's used for criminal enterprises like ransomware and black markets, sanctions evasion, tax evasion. Ironically, cash is still used for far more crime than Bitcoin, because physical cash is harder to trace. Bitcoin's public ledger means transactions can often be analyzed by investigators.
The question that changed
The turning point: Bitcoin slowly stopped being viewed as a currency. Instead, people began viewing it as digital gold. That changed everything. Because then, instead of asking "can I buy coffee with Bitcoin", people started asking "can Bitcoin preserve my wealth?" Those are completely different questions.
Gold has value because it's scarce, difficult to produce, it's durable, it's portable, and it's divisible. And of course, it's widely recognized.
When some of the world's largest financial institutions began offering Bitcoin products, it signaled that Bitcoin was being treated as a legitimate asset class rather than a fringe experiment. Institutional access expanded significantly through regulated investment vehicles and custodial services. The conversation shifted from "is Bitcoin real?" to "should Bitcoin be part of a diversified portfolio?"
Where it goes from here
Whether Bitcoin ultimately becomes a permanent foundational financial system or remains a niche store of value is still to be determined, but its journey from a white paper in 2008 to a globally recognized asset reflects something broader. It introduced a new idea: that scarce, transferable digital property can exist without relying on a central authority. That concept has reshaped conversations about money, ownership, and financial infrastructure well beyond Bitcoin itself.
And so this is why, for many, many years, people have turned to the likes of gold to preserve their wealth. Now many are looking at Bitcoin to do the same.
Where Bitcoin ultimately goes from here is still being written, but its journey from something many dismissed entirely to something the financial system can no longer ignore tells us just how much the conversation has changed.
Thanks for spending a few minutes with me. I'd genuinely love to hear your thoughts. So if this notebook sparked something for you, leave a comment below and let's continue the conversation. And I'll see you in the next notebook.
Supporting notesdrawn from the transcript
Take the Ponzi charge first. A Ponzi scheme needs an organizer, a promise of returns, and money from new investors paying the old ones. Bitcoin has no CEO, no company, no promised return and no central operator, so it fails the test on every count. On criminal use, physical cash is harder to trace than a public ledger that investigators can analyze, and cash still pays for far more crime than Bitcoin does.
People changed the question, and that was the turn. While they asked whether they could buy coffee with Bitcoin, they were judging it as a currency and finding it wanting. Once they asked whether it could preserve wealth, they were measuring it against gold instead, on scarcity, durability, portability and divisibility. Regulated products and custody from large institutions moved the conversation again, from whether Bitcoin is real to whether it belongs in a portfolio. That last question is left open.
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This entry puts the shift down to a change in the question. If you think something else did the work, or you were one of the people who dismissed Bitcoin early and changed your mind, say so below. The questions that come back here are where a lot of these entries start.