By Roopa Kudva

In a landmark development, on June 17, the US Senate passed the GENIUS Act, legislation specifically aimed at regulating stablecoins. This marks a new phase for the cryptocurrency ecosystem, boosting clarity and confidence. From a low price of around $3,100 in 2018, Bitcoin has now crossed $2.1 trillion in market value, surpassing Meta, Alphabet, Tesla, and Broadcom.

What started off as a challenge to fiat currencies has steadily evolved into a widely held asset class, and created wealth for many. Here’s how that transition unfolded, shaped by institutional moves, regulatory recognition, and evolving investor behaviour.

In 2020, MicroStrategy became the first listed company to hold Bitcoin on its balance sheet as a treasury asset, with Square and MassMutual following suit. By 2021, larger investors began to enter. The US Securities and Exchange Commission approved spot Bitcoin exchange-traded funds (ETFs) in 2024. This opened the door for traditional institutions and retail investors to access Bitcoin through regulated channels, much like gold ETFs.

Throughout 2025, ETFs have continued to drive inflows while global banks have begun developing structured products tied to Bitcoin. There is early talk of sovereign Bitcoin reserves emerging on the horizon.

Policy discourse has shifted from restriction to structured integration. Between 2018 and 2019, a patchwork of regulatory pushback and uncertainty stalled momentum. In 2020, the US started clarifying its tax treatment, with Bitcoin being formally treated as property where gains are taxed as capital gains.

El Salvador’s recognition of Bitcoin as legal tender in 2021(since revoked) drew global attention. India has introduced a 30% tax on crypto gains (plus surcharge and cess) as well as tax deducted at source, which amounted to recognition without endorsement. In 2025, President Trump backed stablecoin legislation while India prepared a public consultation paper.

In 2018, retail sentiment turned deeply negative and the crypto winter began. By 2020, investors began treating Bitcoin as a store of value (comparable to digital gold), with the inflation hedge narrative gaining ground.

Despite volatility between 2022 and 2023, long-term holding increased while exchange infrastructure improved. Platforms like Lightning Network reduced friction for users. Throughout 2024 and 2025, spot ETFs normalised Bitcoin in mainstream portfolios. Retail and institutional investors now access it through regulated, familiar products. Risk appetite has evolved, and while volatility remains high Bitcoin is no longer seen as purely speculative. Instead, it is treated as a long-duration asset.

India allows ownership and trading of Bitcoin, but the Reserve Bank of India remains concerned about systemic risks. A 30% tax on income from crypto and 1% tax deducted at source on transactions continues to act as a deterrent.

Policy engagement is growing, however. A government consultation paper is expected in mid-2025. Industry groups are pushing for a shift from prohibition to prudence. A Bitcoin reserve pilot has been informally proposed. India is taking a measured approach, watching global developments closely while avoiding any rushed decisions.

Bitcoin is no longer defined by ideology or anonymity. It is treated as an alternative asset like gold or venture capital. It is used for diversification, long-term appreciation, and macro hedging. Volatility remains a feature, but the investor base is broader and more informed. The shift is ongoing but unmistakable.

Risks

Limitations of “digital gold” analogy: Gold has over 5,000 years of historical precedent as a store of value. Gold maintains value during total system failures such as wars, internet outages, or power grid collapse, while Bitcoin requires functioning digital infrastructure to operate.

Gold’s supply is physically constrained by mining economics, whereas Bitcoin’s scarcity depends entirely on code. Could that theoretically be changed by consensus? Additionally, gold has industrial and decorative utility beyond investment. To be a true store of value in the long term, it would also arguably need lower volatility and higher stability of purchasing power.

Cyclical adoption: Current institutional interest may be driven by low interest rates and liquidity, which are conditions that could reverse and make traditional assets more attractive. Corporate Bitcoin holdings often represent small percentages of balance sheets and could be quickly liquidated during financial stress.

ETF inflows can reverse rapidly, as seen in other asset classes during market corrections. Regulatory approval in one jurisdiction doesn’t guarantee permanence, as policies can change with new administrations or financial crises.

Systemic risks: Quantum computing advances could potentially compromise Bitcoin’s cryptographic security, undermining its fundamental value proposition. Major exchange hacks or custody failures could trigger institutional flight and regulatory crackdowns.

Central bank digital currencies, including in India, might provide government-backed alternatives that reduce demand for decentralised cryptocurrencies. Environmental concerns about energy consumption could lead to stricter regulations. Extreme volatility during the next major financial crisis could demonstrate Bitcoin’s correlation with risk assets rather than its safe-haven properties.

Here to stay

Bitcoin’s value comes from being trusted, secure, and useful, especially as a store of value or a hedge against inflation. Its worth will be sustained if market demand and belief in its long-term utility sustains.

As it becomes more embedded in regulation, institutional portfolios, and financial narratives, questions about its lack of asset backing are becoming less relevant. The debate is shifting from whether Bitcoin has value to how it fits into the broader financial system. Bitcoin hasn’t replaced money, but it does appear it’s here to stay.

The writer is a business leader and start-up investor.

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