Chapter 16
Bitcoin
Bitcoin is digital gold. Only 21 million bitcoins will ever exist. No government controls it. No company runs it. It's the original cryptocurrency — and still the most trusted.
The scarcity thesis
There will only ever be 21 million bitcoins. That's it. No government, no company, no person can create more. It's written into Bitcoin's code and cannot be changed.
Compare that to regular money: central banks print as much as they want, whenever they want. That's why your euros lose value every year. Bitcoin is the opposite — the supply is fixed forever. And demand keeps growing: companies like Strategy now buy more Bitcoin in a single day than miners create.
This is why many people call it digital gold — except it's easier to store, easier to send, and easier to verify.
Performance
Historically, Bitcoin has delivered average annual returns of roughly 30%. That's extraordinary — but it comes with extreme volatility. Bitcoin can drop 50–70% in a bad year and recover to new all-time highs within a few years.
Major crashes and recoveries
Bitcoin has been declared "dead" hundreds of times. Every time, it came back stronger:
| Year | Drop | What happened |
|---|---|---|
| 2014 | -58% | Mt. Gox hack — the largest exchange got hacked |
| 2018 | -84% | Crypto winter — the bubble burst |
| 2020 | -50% | COVID crash — recovered in months |
| 2022 | -77% | FTX collapse + interest rate hikes |
After every single crash: new all-time highs within 1–3 years. That's the pattern. It doesn't guarantee it will happen again — but it has happened every time so far.
Who's buying Bitcoin?
Bitcoin is no longer just for tech nerds. It's gone mainstream. Major players are now in:
- Companies: Strategy (formerly MicroStrategy) holds over 700,000 BTC. Tesla, Block (Square), and dozens of other public companies hold Bitcoin on their balance sheet.
- Countries: El Salvador and the Central African Republic made Bitcoin legal tender. The US created a Strategic Bitcoin Reserve in 2025.
- Wall Street: BlackRock, Fidelity, and other major asset managers launched Bitcoin ETFs. Combined, they hold billions in Bitcoin.
- Banks: Goldman Sachs, Morgan Stanley, and major European banks now offer Bitcoin exposure to clients.
How to buy Bitcoin
You have two main options:
- Crypto exchange — platforms like Coinbase, Kraken, or Bitvavo. You create an account, deposit money, and buy Bitcoin directly. You own the actual Bitcoin.
- Bitcoin ETF — buy through your regular broker (like DEGIRO or Trade Republic). This is the simpler route — it works just like buying any other ETF. You can even DCA into it monthly.
If you're already comfortable with your broker from buying ETFs, the Bitcoin ETF route is the easiest way to start. No new accounts, no crypto wallets, no extra complexity.
There's also a third option: buying Bitcoin on an exchange and moving it to cold storage — a physical hardware device (like a Ledger or Trezor) that keeps your Bitcoin completely offline. This is the most secure way to hold Bitcoin long-term, because no exchange hack can touch it. The trade-off: you're responsible for keeping your device and recovery phrase safe.
Key takeaway
Bitcoin is the original cryptocurrency and the most proven digital store of value. It's volatile, but every crash so far has been followed by higher highs. A small allocation — 5–15% of your portfolio — can significantly boost your long-term returns.