vor 5 Monaten
Summary Bitcoin (BTC-USD) failed to achieve widespread adoption as a medium of exchange, hindered by volatility, scalability, regulatory, and security challenges. I see the recent crypto winter, institutional ETF outflows, and heightened risk aversion as reinforcing Bitcoin's speculative, rather than transactional, role. The El Salvador experiment underscores Bitcoin's limited real-world adoption, with only 20% of residents using it and minimal remittance impact. I am shifting focus from Bitcoin to crypto miners pivoting toward AI data center infrastructure, favoring IREN, RIOT, and BITF, and monitoring utilities like NEE, CEG, and DUK. The first time I bought Bitcoin ( BTC-USD ) was in 2018, and almost eight years later, is an investment I already hold, although now it represents a very small portion of my portfolio. In any case, it has become a position I want to sell because of its high price volatility. I think it has turned into an asset that is extremely sensitive to several factors that I don't fully understand, and the recent decline led me to conclude that a new crypto winter is approaching. However, the most important reason I want to sell my Bitcoin position is that it has not met my expectations of becoming a medium of exchange or a credible alternative to the dollar. The only legal case we know of is El Salvador, which I will discuss later. Several governments are exploring the use of Bitcoin, and this could still happen in the future. However, I was expecting a deeper and more massive use. I mean, I was expecting a more spontaneous adoption that simply didn't happen. A 2022 report by Deloitte found that nearly 75% of retail merchants expected to accept cryptocurrency payments within two years. At the same time, the report warned about regulatory and security risks, as well as concerns over price volatility. I believe this point is crucial, as merchants are particularly vulnerable to volatility. If you had been reading that report in 2022, you probably would have imagined a much brighter future. But today, almost four years later, a report by PayPal shows that only 39% of merchants accept cryptocurrency payments, not 75%. Moreover, the report indicates that the respondents expect full adoption to take longer, postponing that goal to 2031. But at the end, however, I believe the most important form of adoption is not by merchants but by individuals. And in this context, the picture is even more concerning: in my view, it is a very negative sign that only 1% of the volume of stablecoin shipments corresponds to real payments. McKinsey & Company Most transactions are financial transfers, particularly movements between exchanges. What I'm trying to say is this: most Bitcoin users don't use it to simply buy a coffee, but rather as a speculative investment. Stablecoins, which I mentioned earlier, represent a meaningful attempt to reduce volatility, but I think that takes away from the essence of Bitcoin's original idea of revolutionizing the traditional financial system. The reasons behind the low usage of Bitcoin I believe there are several key factors that blocked the use of Bitcoin. One of them is volatility: the asset's price fluctuates minute to minute, and that affects accounting for both merchants and users, especially during periods of sharp price drops. Closely connected to that, we must mention the problem of scalability because the Bitcoin network itself has a very limited capacity to process transactions simultaneously. Because of its block size and design, the network can handle seven transactions per second. So, as more users attempt to conduct retail transactions, the slower the network could become, further complicating its efficient use. Geeks for Geeks In that case, there is a double disadvantage because in periods of high volume and rising prices, the network can become congested due to the high number of transactions in the system, making it slower and more expensive to use. At the same time, in periods of falling prices, even if transaction volume declines, using Bitcoin for trading transactions would be less advantageous: with the same fraction of Bitcoin, I'll be buying fewer products. Other factors that affect the use of Bitcoin include the lack of clear regulation, which is essential to protect users, and the lack of security against password loss or cyberattacks. When I talk about a clear regulation, I mean a legal framework that goes beyond simply collecting taxes, as I believe is the case with the 1099-DA scheduled for implementation by the end of this fiscal year. And when I speak about regulation to protect users, I mean there isn't a well-defined compensation system similar to the protections available in the banking sector. What I'm trying to say is this: consider losing a password or having your credit card stolen. You can request a new password from the issuing bank, as well as dispute charges after reporting theft. There is a clear process and an established protection framework. Now think about Bitcoin. It hasn't achieved massive adoption as a currency, nor has it developed a strong private protection framework, and therefore there's no way to make quick and secure claims. As I said before, stablecoins rely on the traditional banking system to prevent those issues. But the model remains similar: heavy regulation and high transaction costs. You can hold a stablecoin, but that won't prevent the loss of purchasing power of the dollar. In the following image, you can see the historical loss of value of the dollar based on CPI. MacroTrends So, these problems remain key barriers to the use of Bitcoin as a medium of exchange. Since I've mentioned four determining factors, I think it's worth mentioning them: volatility, scalability issues, lack of clear regulation, and security risks. These are also the main four concerns cited by chief financial officers, according to a Deloitte survey . Deloitte The case of El Salvador Nayib Bukele was the first president to adopt bitcoin as a legal tender, with congressional approval in 2021, although it kept the dollar as the accounting reference currency. However, at the beginning of 2025, the government reversed the mandatory nature in order to reach an agreement with the IMF for a $1.4 billion loan, which ultimately removed Bitcoin as a mandatory currency of exchange. In other words, it remains legal tender, but it isn't mandatory. This shift revealed a much more complicated reality: Bitcoin was never used in the country; only 2 out of every 10 inhabitants used Bitcoin, according to the latest report from 2024. Bukele had envisioned Bitcoin as a tool to promote financial inclusion and strengthen remittances as a driver of private investment. But none of that happened. Only about 1% of remittances were conducted using cryptocurrencies. That doesn't change the fact that Bukele's government continues to promote its use and manage its reserves through Bitcoin. However, recent developments are not encouraging at all. Heavy selling also affected El Salvador's reserves. Once again, its extreme volatility can lead to very negative consequences. Over the past few months, the government lost 22% of the value of its reserves . According to the data from February 16, the government held 7,564 bitcoins valued at $513 million after adding 46 new coins. However, due to falling prices, the reserves declined from $658 million. Beyond price fluctuations, my main point is that Bitcoin didn't achieve broad adoption among the population. That, in my view, is where the Salvadoran experiment ultimately fell short. Current Factors 2026: a new crypto winter? In addition to the obstacles Bitcoin faced in its implementation as a medium of exchange, a strong wave of selling has reinforced my concerns since the end of 2025. Bitcoin-focused ETFs have seen $7.5 billion in outflows since October. Net monthly flows have been negative for the past four months. The largest outflow occurred in October, similar to the one recorded in January of last year. You can see this trend in the CoinMarketCap chart. CoinMarketCap This confirms a reduction in institutional positions through ETFs, which also doesn't appear to be recovering in February, with an approximate negative balance of $1.5 billion. CoinMarketCap There are several situational factors that, I believe, are influencing the recent sell-off, and although they may be circumstantial, I see them as indirect drivers of a more structural issue: Bitcoin is not functioning as a medium of exchange, at least for now. These circumstantial factors give rise to periods known as crypto winters. From 2021 to 2024, for example, there was a crypto winter, and I think another one may be beginning. Data by YCharts In my view, risk aversion is one of the factors strongly affecting Bitcoin. Risk aversion has been rising due to the increased likelihood of armed conflicts and geopolitical tensions. 2026 started with the operation to remove Venezuela's Maduro from power, but now the most important is Iran. And we should not forget about the Russia-Ukraine war. That is on the geopolitical front. On the trade front (which is also tied to geopolitics), the Supreme Court ruling against the reciprocal tariffs imposed by the Trump administration via IEEPA added tension to an already adverse investment climate. In fact, Trump's rejection of that ruling and his insistence on an additional 15% tariff are what the market liked least. Geopolitical risks are fueling other domestic tensions and threatening the Achilles' heel of Bitcoin and digital assets: liquidity constraints. The Fed's monetary policy is attempting to become more flexible, softening QT with the bond repurchase program initiated last December. I believe that decision may have come a bit late, because we must also consider the prospect that the interest rate cut cycle will be delayed longer than expected. This is where inflation comes into play, which closed at 2.9% in 2025, far from Jerome Powell's plan to approach 2%. If oil keeps rising (another geopolitical repercussion), I find it hard to imagine inflation declining, which reduces the likelihood of accelerating the rate-cutting process. Finally, but no less important, we must take a look at the designation of Kevin Warsh as the new Chair of the Fed starting in June. This increases uncertainty because, despite Trump promoting him as aligned with his rate-cutting policy, the market is interpreting him as more hawkish. In this sense, the problem isn't so much whether Warsh is hawkish or dovish, but rather the conditions under which he will assume his position: inflation closer to 3% than 2%, elevated geopolitical risks, and a rather divided FOMC, according to the minutes released from the January meeting. Why does all this affect Bitcoin? Because when risk aversion increases, the most volatile assets suffer the most, especially when there are no underlying industrial fundamentals, as can happen with metals. Bitcoin can function as an alternative asset in certain contexts, but I believe that today it operates more as a speculative investment than as a medium of exchange or a stable store of value. New investment perspectives Based on what I've said so far, my conclusion is that I'll sell my Bitcoin position. What am I waiting for? The right moment. I feel I should have sold around $120,000, and I didn't. But I'll probably sell closer to that amount if the opportunity arises. Otherwise, I may have to sell for much less or wait a little longer. I want to make it clear that my position is not that Bitcoin can't return to all-time highs. A future scenario of greater liquidity, with much lower interest rates than today and less risk aversion, will surely help a price rebound. But I believe a completely different environment is emerging. That's why I decided to shift my investment focus toward the energy infrastructure behind Bitcoin mining and crypto mining in general. The energy infrastructure is extremely valuable and forms the foundation of crypto networks. Bitcoin challenges in the long term were seen by crypto miners, and that's why they are trying to adapt their business to a more tangible and practical reality: AI development and HPC. Although technology companies occasionally experience price fluctuations, as seems to be happening in 2026, the reality is that AI is expanding rapidly at the business level, and demand is growing at a very fast pace. That's why I set my eyes on crypto miners that are repositioning themselves as AI hosting providers, supplying infrastructure for the data center boom. Some of the companies I like the most are IREN Limited ( IREN ), Riot Platforms (RIOT), and Bitfarms ( BITF ). I have recently written articles on Seeking Alpha about all three companies. From Bitcoin To AI: IREN's GW-Scale Platform Is Built For Hyperscalers Riot Platforms: AMD Today, Many AI Players Tomorrow Bitfarms: Capitalizing On The Next Generation Of AI Data Centers In the more original energy sector, that is, in the companies that operate along the electricity value chain to provide electricity, I believe there are also opportunities. Many of the major utilities have contracts with hyperscalers to supply future AI data centers. Companies such as NextEra Energy ( NEE ), Constellation Energy ( CEG ) or Duke Energy ( DUK ) are the ones I usually follow closely. They may not look particularly cheap at the moment, but I think they are worth keeping on your radar. Conclusions My investment experience with Bitcoin was thrilling, but it didn't meet my expectations regarding its adoption as a medium of exchange. After carefully analyzing the asset, I found that several factors hindered this objective, including extreme volatility and technical issues that continue to discourage the general public from using it. The experiment in El Salvador, with its mandatory legal tender status, also failed to deliver meaningful results or generate broad appeal among its population. My decision to sell comes on the cusp of another crypto winter, with the price continuing to fall from its highs of over $120,000 last October. Risk aversion, liquidity restrictions, and rising geopolitical tensions are the factors that I believe will continue to put downward pressure on the price. I'm not setting target prices because I wouldn't dare do so with a digital asset, especially one as volatile as Bitcoin. I'll simply wait for the right moment to sell my position. However, I believe that within the broader Bitcoin industry, there are attractive investment opportunities that are more stable and better suited for the long term. I'm talking about the contracts that crypto miners are securing with large technology companies as they reposition themselves to become AI data center hosts.