Bitcoin Could Drop to Zero: No State Backing Guarantees Its Value

Bitcoin: Nine Years of Trading Without a State Behind It

Can Bitcoin drop to zero overnight? This question has haunted the cryptocurrency since its inception, and in early 2018, with Bitcoin at historic highs and nearly a decade of trading history behind it, there is no reassuring answer. There is no state behind it. There is no central bank ready to step in as a lender of last resort. The price is sustained by large holders, who can move it whenever and wherever they want. And according to the most uncomfortable thesis, they will do so. Pure speculation, with no safety net.

The debate is not new: it has been going on for nine years. What changes is the context. Bitcoin is no longer a laboratory curiosity; it moves billions and has become a trendy asset. The higher it rises, the more painful the question becomes about what happens if it falls.

When the Audited Entity Is Worth Zero

The first argument launched against panic is the track record. Gowex, Banco Popular, Bankia, Banco Madrid were audited by countless institutions. Not only did they end up worth zero—the minimum value attributed to Bitcoin—but some even had negative value, forcing the state to bail them out with public money. If a company with audits, employees, offices, and deposited accounts can collapse, an institutional seal is no guarantee.

This leads to the question that no one answers with numbers: if audited entities can go to zero, why would Bitcoin, which promises nothing similar, be any different? The difference is that a bailed-out bank leaves behind assets, debt, mortgages, and staff. When Bitcoin falls, it leaves only the price. And that price, moreover, is not a physical constant.

Why Does Bitcoin Need the Euro to Have Value?

Here lies the most repeated and hardest-to-refute point: the reference of value. Bitcoin does not sustain itself independently of state currencies, but thanks to them. You buy groceries with euros; you cannot yet do so with bitcoins. Its valuation depends on the dollar or euro, and without a major currency facing it, it turns into smoke.

Parallels with other markets offer little comfort either. The S&P 500, DOW, DAX, IBEX, and NIKKEI also move based on flows. There is talk of 80 billion in floating capital entering and leaving within days. If this smells like manipulation in traditional stock markets, in a market with no hours or supervisor, it smells worse.

Drugs, Weapons, and Uncomfortable Traceability

Incivil use has served as an argument in both directions. For some, Bitcoin lives off paying for weapons, drugs, or services on the dark web, giving it a residual value that does not disappear. For others, that is precisely its condemnation: without that demand, the asset would be worthless.

The most uncomfortable answer comes from within the sector itself: Bitcoin transactions are traceable by governments and large corporations. Those truly seeking opacity do not use Bitcoin; they use Monero, Zcash, or similar protocols. In other words, even black money does not need it.

On another scale, there is debate about whether the future lies in a global currency. The suggested answer does not involve bypassing central banks, but integrating them: if it arrives, it will come through them, not against them.

Gold Played in Another League

The analogy with gold is tempting but misleading. For millennia, precious metals have been the only things to maintain value and utility. And not by magic: gold has anticorrosive properties, ductility, and malleability that made it ideal as currency and jewelry. A Bitcoin does not rust, but it is an accounting entry that depends on someone accepting it.

The problem is that Bitcoin introduces parameters that gold never had: transfer estimulante ilegal, 51% attacks, and alternative protocols that can render it obsolete. Comparing it to a metal that has been constant for centuries is comfortable, but explains nothing. The rise of Bitcoin looks more like a tulip mania than a store of value.

The Technical Limit That Rules Out Everyday Payments

There is a cap that does not depend on trust or price: the network is not designed to support a very high number of transactions per minute. This excludes it from widespread use as an electronic payment method. It may work as a casino bet or for transactions outside official channels, but not for buying bread.

Against this, the counterargument is always the same: if the financial system were so solid, alternatives would not be needed. Bank bailouts and money issuance by central banks fuel distrust. The debate is not whether Bitcoin is perfect. It is whether the system surrounding it is better.

And here we remain. Nine years later, no one has signed Bitcoin’s death certificate. Nor has anyone appeared who guarantees that tomorrow, on the other side, there will be someone willing to pay for it.