In today’s financial world, perspectives on Bitcoin vary widely. Some have taken time to understand Bitcoin, its technology, monetary design, global implications, and view it as meaningful innovation. Others remain skeptical or cautious – whether due to limited exposure, differing interpretations, or concerns about volatility and regulation.
This divide is not just academic. It can have real consequences for investors and for the professionals who advise them.
Consider this: from 2014 to 2024, Bitcoin has experienced significant price appreciation compared to the S&P 500 at 193%, gold at 126%, and crude oil at just 4.3% (1). It’s worth noting that it is volatile and remains a speculative asset not suitable for all investors and past performance is not indicative of future results. However, this article aims to equip you with the knowledge about where it fits in the financial sector.
Many financial professionals are only just now joining the conversation on Bitcoin. As more start to trickle in, it’s important they provide clients with critical context – especially now, when large institutions like BNY Mellon, Fidelity, Morgan Stanley, BlackRock, and JPMorgan offer Bitcoin custody, ETFs, and research (5).
This article will educate financial professionals and curious readers on what it means to not understand Bitcoin and why financial literacy on this subject is becoming essential.
Not Understanding Bitcoin Means Not Understanding Money
To understand Bitcoin, you first need to understand money itself: its history, purpose, and evolution.
Money has taken many forms over time: seashells, salt, gold, and silver. What defines something as money is its function as a medium of exchange, a store of value, and a unit of account.
Historically, money was tied to scarce commodities. That changed in 1971 when the U.S. fully left the gold standard, ushering in today’s fiat era where money is backed by government decree rather than scarcity.
Fiat systems rely on trust in central authorities. When printing more money becomes the solution, currencies lose value over time.
Bitcoin is a digital return to hard money principles. Its supply is fixed at 21 million coins, with an issuance schedule written into its code (2). Unlike gold, where supply grows each year, Bitcoin’s supply schedule is unchangeable. However, gold differs from Bitcoin in other ways too. In addition to its monetary role as a store of wealth, gold is valued for industrial, technological, and consumer applications across the global economy. These non-monetary uses give gold a unique demand and liquidity profile, making it a distinct asset alongside Bitcoin.
To overlook this is to miss one of history’s oldest debates: whether societies are better served by ‘hard money,’ which holds its value because it is scarce, or by ‘easy money,’ which can be expanded at will but risks eroding purchasing power. That choice has shaped the rise and fall of economies for centuries.
Not Understanding Bitcoin Means Not Understanding Innovation
Bitcoin is not only a monetary breakthrough, but also a technological one.
Its proof of work system solved a decades-old problem in computer science: reaching consensus in a decentralized, trustless network (3). Miners secure the network with energy, making it resilient and costly to attack.
Equally important is Bitcoin’s decentralized architecture. There is no CEO, no headquarters, no single point of failure. Thousands of nodes worldwide maintain the system. While there are worries about challenges with the high energy consumption and regulatory uncertainty in some jurisdictions, this can be viewed as the growing pains of an emerging technology instead of structural concerns.
As adoption grows, the network effect strengthens (4). Ignoring these fundamentals because of short-term volatility may overlook both its potential and its risks, much like early reactions to the internet in 1994, when web pages loaded slowly, but also when concerns about regulation and utility for the internet were valid and unresolved.
Not Understanding Bitcoin Means Not Understanding Modern Economics
Since the 2008 financial crisis, central banks have expanded money supply at historic levels. The Federal Reserve’s balance sheet grew from under $1 trillion to nearly $7 trillion, while U.S. national debt now exceeds $36 trillion (5).
This is not theory; it has been witnessed repeatedly throughout history. From Weimar Germany’s hyperinflation in the 1920s, where prices doubled every few days (9), to Zimbabwe in the 2000s, where trillion-dollar banknotes became worthless (10), to modern Venezuela, where inflation peaked at more than 10 million percent in 2019 (11), entire populations saw wages and savings wiped out as governments printed money faster than economies could grow. While the U.S. is not experiencing hyperinflation, the same principle applies on a smaller scale: consistent monetary expansion gradually reduces long-term purchasing power.
Bitcoin’s capped supply offers a counterpoint and potential diversification opportunities, including digital asset-based investments. This is why publicly traded companies have begun holding it in treasury strategies (5), and why leading institutions now provide Bitcoin products and services. Spot Bitcoin ETFs, approved in the U.S. in 2024, further underscore its recognition as an asset class (5).
Even the U.S. government has taken steps that suggest a growing recognition of Bitcoin’s role in financial markets. In March 2025, an executive order created a Strategic Bitcoin Reserve and Digital Asset Stockpile, designating Bitcoin as a formal reserve asset (8). These reserves are funded with Bitcoin already held by the Treasury and are classified as permanent, not temporary. As of August 2025, the U.S. government holds roughly 198,000 BTC, making it the largest known sovereign holder of Bitcoin worldwide (8). When a government formalizes Bitcoin on its balance sheet, it signals clearly that Bitcoin is not a passing trend. While these actions signal institutional interest, Bitcoin’s long-term role remains subject to market and regulatory developments.
Not Understanding Bitcoin Means Not Understanding Human Behavior and the Global Picture
Skepticism toward Bitcoin is not unusual. Behavioral finance shows that people anchor to existing systems and resist paradigm shifts. Disruption rarely begins with consensus, and new paradigms often face skepticism before eventual adoption.
Globally, however, Bitcoin is not viewed as a theory but as a necessity. In countries like Argentina, Turkey, and Nigeria, where inflation is rampant and local currencies are losing value, Bitcoin is used to preserve wealth and bypass capital controls (6).
Failing to recognize both the behavioral resistance and the global use cases of Bitcoin overlooks some of its most urgent and transformative functions.
Not Understanding Bitcoin Means Misunderstanding Its Place in Finance
Bitcoin is often grouped under “crypto,” but it has decisively separated from that label.
Bitcoin technology features a focus on 3 main factors: security, scarcity, and settlement (7). Unlike thousands of speculative projects, Bitcoin is increasingly recognized as a digitally native store of value.
Financial firms now treat it as distinct from other digital assets. Understanding this distinction is key to placing Bitcoin in conversations about the long-term market and diversified portfolios.
The Cost of Not Understanding Bitcoin
For investors, the cost of ignoring Bitcoin has already been significant. Even a modest allocation years ago could have materially improved portfolio outcomes (1). For financial professionals, the standard is even higher. Clients ask about it. Institutions provide it. The media covers it daily. Remaining uninformed is no longer a neutral stance. It risks being a professional blind spot.
Bitcoin is no longer an experiment on the fringes. Its monetary design, its technology, its government-level recognition, and its global adoption have made it one of the defining financial innovations of the 21st century. To not understand Bitcoin today is to not fully understand money, innovation, modern economics, or global finance.
This article is not an investment recommendation. It is an invitation to financial professionals and investors alike to explore, study, and stay informed. Understanding Bitcoin’s design and market role may help them stay informed in a rapidly evolving financial landscape.
Disclaimers
Chris Millar, Financial Advisor at Millar Financial, affiliated with Wilde Wealth Management Group. 7025 N Scottsdale Road; Suite 115 & 110, Scottsdale, AZ 85253
Bitcoin and crypto currency are not securities, not regulated, and not approved products offered by Cetera Advisors LLC. Crypto-currencies and other block-chain related non-securities products cannot be recommended, offered, or held by the firm.
Securities and advisory services offered through Cetera Advisors LLC, member FINRA/SIPC, a broker/dealer and Registered Investment Adviser. Cetera is under separate ownership from any other named entity
Exchange-traded funds are sold only by prospectus. Please consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the investment company, and can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Digital currencies are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view cryptocurrency as a purely speculative instrument. You cannot currently buy or sell individual cryptocurrencies directly in a Cetera account. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. All investing involves risk, including risk of loss of principal.
Works Cited
- “Bitcoin Delivers 26,931% 10-Year Returns Outpacing Stocks and Gold.” The Crypto Basic, 17 Dec. 2024, https://thecryptobasic.com/2024/12/17/bitcoin-delivers-26931-10-year-returns-outpacing-stocks-and-gold.
- “Why Is Bitcoin’s Supply Limit Set to 21 Million?” Decrypt, 2020, https://decrypt.co/34876/why-is-bitcoins-supply-limit-set-to-21-million.
- “Bitcoin Protocol.” Wikipedia, https://en.wikipedia.org/wiki/Bitcoin_protocol.
- “Why Is Bitcoin Valuable?” CCN, https://ccn.com/education/crypto/why-is-bitcoin-valuable.
- “Bitcoin ETFs Have Arrived. Now What?” Wall Street Journal, 2024, https://www.wsj.com/video/bitcoin-etfs-have-arrived-now-what-cfp-iwi/67C7F61C-BC21-47CF-984F-B9347379B0A8.
- “Bitcoin by the Numbers: Outperforming the S&P 500 and Protecting Against Inflation.” Viska Digital, https://viskadigital.com/en/articles/bitcoin-by-the-numbers-outperforming-the-sp-500-an.
- “Bitcoin vs. Traditional Assets: Price Returns.” CoinGecko Research, https://www.coingecko.com/research/publications/bitcoin-versus-traditional-assets-price-returns.
- “Fact Sheet: President Donald J. Trump Establishes the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile.” The White House, 6 Mar. 2025, https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-establishes-the-strategic-bitcoin-reserve-and-u-s-digital-asset-stockpile.
- “Hyperinflation in the Weimar Republic.” Federal Reserve History, 22 Nov. 2013, https://www.federalreservehistory.org/essays/weimar-hyperinflation.
- “Zimbabwe: Challenges and Policy Options after Hyperinflation.” IMF Departmental Paper, 2010, https://www.imf.org/external/pubs/ft/dp/2010/afr1003.pdf.
- “Venezuela Inflation Hits 10 Million Percent.” BBC News, 14 May 2019, https://www.bbc.com/news/world-latin-america-48265286.