Investment Case for Bitcoin in 2025

• Only 21 million Bitcoin will ever exist. This limited supply helps protect against losing money when governments print too much cash, causing prices to rise everywhere. Like gold, Bitcoin’s rarity could make it worth more over time. 

• Bitcoin network lets people hold and move their money without needing a bank. This is especially valuable in regions facing inflation, currency controls or unstable financial systems. 

• The launch of US spot Bitcoin ETFs and the inclusion of Bitcoin in corporate treasuries have brought mainstream credibility and accessibility to the cryptocurrency. Firms like MicroStrategy and Tesla, along with asset managers like BlackRock, have made significant allocations, further cementing Bitcoin’s place in institutional portfolios. 

• Bitcoin’s decentralised structure not only ensures protocol integrity but also strengthens over time through a demand-security feedback loop. This makes Bitcoin antifragile which helps it shine during times of financial distress. 

Bitcoin has come a long way, from being a niche digital idea to a serious player in global finance. Once ridiculed, Bitcoin is now the world’s sixth-largest asset, seen as a hedge against inflation and economic instability, increasingly backed by major banks, corporations, and even governments. 

This year marked a major milestone with the announcement of the US Bitcoin Strategic Reserve. A more supportive stance from the US SEC has further boosted confidence among traditional asset managers.  While Q1 saw net outflows across the spot Bitcoin ETFs, April was a turning point as flows turned positive. Bitcoin’s growing correlation with gold during early Q2 reinforced its role as a digital safe haven. It’s no longer just an experiment for institutions but is becoming a strategic part of institutional portfolios. 

In this piece, we’ll break down the core ideas behind Bitcoin’s appeal as an investment, using a clear, first-principles approach. Let’s dive in. 

Historical Precedent of Monetary Debasement 

Fiat currencies are vulnerable to devaluation through excessive printing – a problem that began with debasing coins and continues today through tools like quantitative easing. While moderate inflation can support growth, too much of it erodes savings, distorts prices and weakens public trust. Striking the right monetary balance is essential, but not all systems manage it well. 

Poor monetary policies have led to some major crises in the past. Zimbabwe’s 2007-2009 hyperinflation hit a staggering 79.6 billion percent per month, effectively making its currency worthless. More recently, between 2016 and 2019, the Venezuelan Bolívar experienced hyperinflation so severe that prices doubled every few weeks and the annual inflation rate peaked at over 10,000,000% in 2019. These episodes show the risks of centralised monetary systems where money supply growth relies on human decision-making, not hard-coded rules. 

The global inflation map from May 2024 (Fig. 1) clearly reveals that inflation is not a problem in just a few troubled economies but a widespread concern across the world. Many countries in Africa, Latin America and Eastern Europe are facing double-digit inflation, while even parts of Asia and Oceania are seeing elevated levels.  

This shows that monetary debasement affects people everywhere, not just in isolated regions. As a result, more individuals and institutions are exploring alternative stores of value like Bitcoin, especially in places where local currencies are rapidly losing their strength. 

Figure 1: A comparison of inflation rates across the globe 

Source: Global Finance Magazine (8 May 2024) 

Scarcity as an Antidote to Debasement 

Bitcoin’s fixed supply was a game-changer when it comes to addressing the risk of fiat currency debasement. With a hard cap of 21 million, Bitcoin is immune to the inflationary pressures that come with central banks freely expanding or contracting their money supply.  

Bitcoin stands out as the first digital asset with inelastic supply. This programmed scarcity isn’t just a feature, it’s a commitment that no government or institution can alter. In fact, this scarcity may be Bitcoin’s most powerful investment trait. Its 21 million limit creates a digital form of scarcity, similar to the natural scarcity we see in precious metals, like gold. 

Another key factor is the Bitcoin Halving (elaborated further below) which cuts the rate of new Bitcoin creation by 50% roughly every four years. This event steadily reduces the inflation rate of Bitcoin’s supply over time. Unlike traditional currencies, where supply can be adjusted by central authorities at will, Bitcoin’s issuance is predictable and fixed. 

This fixed supply becomes even more important when considering Bitcoin as a long-term store of value. As more people adopt Bitcoin, but the supply keeps shrinking, basic supply and demand principles suggest that its value should rise (assuming demand stays strong or grows). In a world where central banks are constantly expanding their money supply, Bitcoin’s limited nature makes it an appealing option for portfolios looking for inflation-resistant assets. 

Figure 2: Bitcoin Price vs 100-day offset Global M2 Supply

Source: AMINA Bank, TradingView, AMINA Bank 

The chart above shows how closely Bitcoin’s price has tracked the growth in global M2 money supply (the amount of cash and easily accessible funds in the system). As central banks have pumped more money into the economy over the years, Bitcoin has often moved in step, reflecting investor concerns about the weakening value of fiat currencies. 

The Bitcoin Halving is an event that happens roughly every four years where the reward for mining new blocks is reduced by 50%. This is a key part of Bitcoin’s monetary policy, controlling how quickly new bitcoins are introduced into circulation. When Bitcoin launched in 2009, miners were rewarded with 50 BTC per block. With every Halving, miners see a 50% reduction in block rewards. The network currently distributes 3.125 BTC in rewards per block following the 2024 Bitcoin Halving. The next Bitcoin Halving is expected to occur in 2028, when block rewards drop to 1.5625 BTC. 

This halving process is crucial for ensuring Bitcoin’s digital scarcity, setting it apart from central bank-controlled fiat currencies. This predictable supply reduction, paired with increasing demand, could lead to significant upward pressure on its price over time. 

This ensures a code-based supply control for Bitcoin. For investors, the halving acts as a key trigger, reinforcing Bitcoin’s role as digital gold. 

Bitcoin gives individuals and institutions the ability to control their wealth directly, without needing to rely on third-party intermediaries. This level of financial sovereignty isn’t possible with many traditional assets. By allowing self-custody, Bitcoin allows investors to eliminate the counterparty risks associated with banks and other financial institutions, although it does come with the added responsibility of ensuring personal security and key management. 

Bitcoin’s ethos is rooted in the idea that users should have full control over their private keys, with no risk of their funds being seized or frozen by third parties. This feature makes Bitcoin especially valuable in regions with unstable financial systems, currency controls, or weak property rights. For investors looking to shield themselves from systemic financial risks or seeking to diversify beyond their local systems, this self-sovereignty provides a unique strategic advantage. 

For example, in countries like Argentina and Lebanon, where inflation and currency controls have eroded trust in the banking system, many have turned to Bitcoin as a more stable alternative to store value. Similarly, during political unrest in Nigeria, citizens used Bitcoin to bypass financial censorship and continue receiving donations. These real-world cases highlight how Bitcoin’s self-custody model empowers individuals to retain control over their assets, even when traditional systems fail. 

Bitcoin’s network architecture is underpinned by the coordinated activity of three distinct participant groups: miners, users, and nodes. Each plays a foundational role in maintaining the functionality, economic security, and decentralisation of the system. 

• Miners serve as the backbone of Bitcoin’s security model by validating transactions and producing new blocks through the proof-of-work consensus mechanism. Their participation is incentivised through the issuance of new Bitcoin and the accumulation of transaction fees. 

• Nodes perform the critical task of enforcing protocol rules through distributed consensus. By independently verifying transactions and maintaining a complete copy of the blockchain, nodes uphold the integrity of the system’s monetary policy and ensure protocol consistency. Their global distribution is central to preserving Bitcoin’s resistance to censorship and centralised governance. 

• Users encompass a broad spectrum of participants (including individuals, institutions and enterprises) who engage with the network by holding, transacting or allocating capital to Bitcoin. Users indirectly pay for network security just by using Bitcoin (e.g. more transactions mean more fees). Their activity not only drives demand and enhances liquidity but also funds network security indirectly via transaction fees. This demand-security feedback loop is a defining feature of Bitcoin’s economic design. 

Together, these participant groups form a resilient and self-sustaining network, characterised by decentralised coordination and aligned incentives. They form a powerful loop: As more people adopt Bitcoin, the demand for BTC increases, which in turn boosts miner profits. This makes the network more secure, leading to even greater confidence in Bitcoin. It’s a cycle that strengthens over time. This is in strong contrast to traditional money systems, where central banks control the money and governments handle security, sometimes also with goals that don’t align. Instead, Bitcoin’s mechanisms make it antifragile, further strengthening it as more people use it.  

Bitcoin’s holder profile is rapidly changing. It’s no longer just held by early adopters and retail investors but is also being embraced by major institutions and businesses. Funds and ETFs are leading the charge, with corporates following close behind, signaling a shift in who is driving demand. Bitcoin is steadily moving into more institutional hands. With ETFs making access easier and companies using it as a treasury asset, Bitcoin is becoming part of the financial mainstream in a way not seen before. 

Figure 3: In 2024, ETF & Funds saw the biggest gains in Bitcoin ownership as individuals took the largest decrease 

Source: AMINA Bank, River.com 

Figure 4: Despite rapid institutionalisation, Bitcoin supply continues to be highly decentralised with individuals holding the highest amount 

Source: AMINA Bank, River.com, Bitcoin Treasuries 

The rise of the US spot Bitcoin ETFs has completely changed the way institutions and retail investors get involved in Bitcoin. The instrument offers a regulated and familiar investment option for traditional capital managers. As of writing, the iShares Bitcoin Trust (IBIT) leads the pack with $62.92 billion in Assets Under Management (AUM) followed by Fidelity’s Fidelity Wise Origin Bitcoin Fund (FBTC) at $30.25 billion. These ETFs have seen over $20 billion in net inflows so far this year. Year-to-date, US spot Bitcoin ETF investments have exceeded $20 billion. 

Figure 5: US Spot Bitcoin ETFs AUM (excluding Valkyrie and Bitwise) 

Source: AMINA Bank, Glassnode 

By investing through the Bitcoin ETFs, investors avoid major hurdles that have traditionally kept institutions at bay: 

• Custodial complexity: They remove the need to manage private keys directly.  

• Regulatory compliance: They operate within the US SEC’s frameworks, ensuring legal clarity. 

• Liquidity: With millions in daily trading volumes, they provide ample liquidity for large-sized transactions. 

Over the past few years, some corporations have begun treating Bitcoin as a treasury asset. Starting in 2020, Strategy (formerly MicroStrategy, a software firm led by Michael Saylor) became the poster child for this strategy, converting excess cash into Bitcoin. MicroStrategy’s purchases began at $250 million between August and December 2020 and continued aggressively. By early 2025, the firm held over 446K BTC valued at over $41.78 billion. 

Figure 6: Total Bitcoin holdings of public and private companies 

Source: AMINA Bank, Bitcoin Treasuries 

And it’s not just Strategy. Currently, private and public companies hold roughly a cumulative of over 1 million BTC, valued at over $110 billion as of 22 May 2025.  

Bitcoin miners MARA Holdings, Riot Platforms and CleanSpark, financial services and investment management firm Galaxy Digital Holdings, crypto giant Coinbase and payments firm Block (formerly known as Square) are other prominent examples of companies incorporating Bitcoin into their corporate treasuries. Such companies do so too as part of operational requirements in addition to their strong belief in Bitcoin as an investment asset. However, we also see non-crypto companies (Strategy being one of them) having large holdings of BTC. Some of these are electric car maker Tesla (11.5K BTC at $1.19 billion), software firm Next Technology Holdings (5.8K BTC at $605 million) and healthcare tech company Semler Scientific (3.6K BTC at $377 million). 

The rationale for incorporating Bitcoin into corporate treasuries is often stated as seeking a hedge against inflation and currency debasement. Bitcoin’s fixed supply contrasts with expanding balance sheets and deficit spending. For corporate treasurers, this means Bitcoin could diversify away from traditionally low-yield cash holdings.  

Traditionally, businesses also parked excess cash in government bonds or interest-bearing accounts. However, with interest rates often lower than inflation, these instruments no longer provide meaningful returns. In some cases, businesses face negative yields, meaning they effectively lose money by holding cash. 

With cracks in traditional fiat systems with rising inflation, seemingly endless money printing, and a growing loss of trust, Bitcoin is stepping up as a real alternative. It’s governed by code, not politics, and its fixed supply brings a sense of discipline that legacy finance struggles to offer. 

What started as a grassroots movement has grown into a global ecosystem. From miners and developers to major institutions and even governments, more players are recognising its value. The rise of spot ETFs and corporate treasury allocations makes it clear: Bitcoin isn’t just for the early adopters anymore but is becoming a serious part of the financial landscape. 

And it’s more than just digital gold. It seeks to be programmable, tamper-proof money built for the digital age. In a world looking for transparency, stability, and long-term trust, Bitcoin is leading the way: quietly but confidently shaping the future of finance. 

Disclaimer – Research  

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