13. Bitcoin is Legitimate.

Bitcoin, once a niche experiment dismissed as a speculative bubble or a tool for illicit activities, has evolved into a globally recognized asset that challenges traditional financial systems. Its legitimacy is no longer a matter of debate but a reality reflected in its technological robustness, growing institutional adoption, and increasing regulatory acceptance across countries and states. As of April 2025, Bitcoin’s journey from skepticism to legitimacy is evident in the strides made by governments, financial institutions, and local jurisdictions worldwide.

A Robust and Secure Technology

Bitcoin’s foundation is its blockchain—a decentralized, transparent, and immutable ledger secured by cryptography. Unlike centralized financial systems reliant on intermediaries like banks, Bitcoin’s peer-to-peer network eliminates single points of failure, making it resistant to censorship or manipulation. The network’s security is reinforced by miners who validate transactions, with the global hash rate reaching record highs in 2024, signaling unparalleled computational strength. Its open-source code invites scrutiny from developers worldwide, ensuring rapid identification and resolution of vulnerabilities. This technological resilience underpins Bitcoin’s legitimacy as a durable and trustworthy system.

Global Progress in Recognizing Bitcoin’s Legitimacy

Bitcoin’s legitimacy is increasingly affirmed by countries and subnational jurisdictions embracing it through legal frameworks, strategic reserves, and acceptance as payment. Below is a detailed look at the progress made globally and within specific regions.

Countries Leading the Charge

  • El Salvador: In 2021, El Salvador became the first nation to adopt Bitcoin as legal tender, a historic move led by President Nayib Bukele to spur investment and financial inclusion. The country has since amassed a national Bitcoin reserve, holding over 5,700 BTC by 2024, and passed the Digital Securities Law in 2023, classifying Bitcoin as a “digital commodity.” Despite initial technical glitches and low adoption rates, El Salvador’s Bitcoin City project and remittance-focused policies highlight its commitment to integrating Bitcoin into its economy, particularly for the 24% of GDP driven by remittances.

  • Central African Republic (CAR): In 2022, CAR briefly adopted Bitcoin as legal tender, aiming for financial inclusion in a nation with limited banking access. The experiment was short-lived, reversed in 2023 due to low internet penetration and economic challenges, but it underscored Bitcoin’s potential in underdeveloped economies.

  • European Union: The EU recognizes Bitcoin and cryptocurrencies as “crypto-assets” under the Markets in Cryptoassets (MiCA) Regulation, effective in phases from June 2024. While member states retain flexibility to regulate crypto, MiCA provides a harmonized framework, requiring exchanges and service providers to meet anti-money laundering (AML) and consumer protection standards. Countries like Germany actively promote blockchain development, with former Finance Minister Christian Lindner advocating Bitcoin as a reserve asset to reduce reliance on the U.S. dollar.

  • Japan: Japan has established itself as a crypto hub in Asia through its Payment Services Act (PSA), which legalizes Bitcoin for payments and regulates exchanges. In 2024, lawmaker Satoshi Hamada proposed a national Bitcoin reserve, reflecting growing political support for Bitcoin as a strategic asset.

  • Russia: Facing Western sanctions, Russia legalized Bitcoin mining and its use for international payments in 2024. Deputy Anton Tkachev proposed a national Bitcoin reserve, signaling a shift toward viewing Bitcoin as a tool for economic autonomy.

  • Hong Kong: Legislator Wu Jiezhuang has advocated integrating Bitcoin into financial reserves to enhance economic resilience. Hong Kong’s Securities and Futures Commission licenses crypto exchanges, fostering a regulated environment for Bitcoin adoption.

  • Brazil and Poland: Both nations are exploring Bitcoin as a strategic reserve asset. In Brazil, legislation has been proposed to stockpile Bitcoin, while Polish politician Sławomir Mentzen has endorsed a national reserve, reflecting Bitcoin’s growing geopolitical significance.

  • Panama: In April 2025, Panama City’s council approved Bitcoin and other cryptocurrencies (ETH, USDC, USDT) for tax payments, fees, and permits, marking a significant step toward municipal-level adoption.

  • Armenia: Proposed crypto rules in April 2025 would allow banks to offer Bitcoin services, indicating a move toward regulated adoption.

  • Other Nations: Countries like Malta, Belarus, and Australia have legalized Bitcoin and related activities, with tailored regulations for exchanges, ICOs, and mining. In Australia, personal Bitcoin gains may be tax-exempt, encouraging adoption. Vietnam, the Philippines, India, and Thailand show increasing crypto adoption, with high transaction volumes.

U.S. States and Federal Developments

The United States, while lacking a comprehensive federal crypto law, has seen significant progress at both federal and state levels, reinforcing Bitcoin’s legitimacy:

  • Federal Level: The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has regulated Bitcoin as a convertible currency since 2013, with exchanges and payment processors classified as money services businesses under the Bank Secrecy Act. The IRS taxes Bitcoin as property. The SEC’s approval of spot Bitcoin ETFs in 2023 marked a turning point, legitimizing Bitcoin for institutional investors. In 2025, President Donald Trump signed the first Bitcoin and crypto bill into law, and the White House issued an executive order establishing a Strategic Bitcoin Reserve to manage government-held BTC, acquired through forfeitures or purchases, with a goal of holding 200,000 BTC annually for five years. The BITCOIN Act of 2024, proposed by Senator Cynthia Lummis, further aims to integrate Bitcoin into federal reserves.

  • State-Level Progress:

    • Utah: In February 2025, Utah’s Blockchain and Digital Innovation Amendments bill advanced, allowing the state treasurer to allocate up to 5% of public funds to Bitcoin, the only asset meeting the $500 billion market cap requirement.

    • Texas: Known for its crypto-friendly stance, Texas proposed bills in 2025 to allocate 1% of its general revenue fund to Bitcoin and to accept Bitcoin donations, leveraging EVT its significant mining industry.

    • Oklahoma: The Strategic Bitcoin Reserve Act (HB 1203) passed the House Government Oversight Committee in February 2025, advancing efforts to establish a state Bitcoin reserve.

    • Montana: In April 2025, Montana passed a “right to use Bitcoin” law, protecting residents’ ability to transact with Bitcoin. However, a separate Bitcoin reserve bill (HB 429) failed in January 2025.

    • New York: In April 2025, New York introduced a bill to allow state government acceptance of cryptocurrencies, including Bitcoin, for payments, signaling growing municipal adoption.

    • Arkansas, Louisiana, and Oklahoma: These states have passed “Bitcoin Rights” bills, safeguarding residents’ ability to own and use Bitcoin without additional taxation.

    • Rejections: States like South Dakota, North Dakota, Pennsylvania, and Wyoming rejected Bitcoin reserve bills in early 2025, citing volatility concerns. Pennsylvania’s HB 2664, which proposed investing 10% of state funds in Bitcoin, was notably blocked.

Challenges and Bans

Despite widespread progress, some countries remain wary of Bitcoin’s volatility and decentralized nature:

  • Bans: China, Egypt, Bangladesh, Bolivia, and North Macedonia have imposed explicit or implicit bans on Bitcoin, citing risks of capital flight, money laundering, or economic instability. China’s 2021 ban, for instance, led to a temporary drop in Bitcoin’s hash rate, though mining shifted to the U.S.

  • Neutral Stance: Countries like Guatemala, Guyana, Haiti, Nicaragua, Paraguay, and Uruguay have yet to clarify Bitcoin’s legal status, reflecting cautious observation.

Institutional Adoption Signals Trust

Bitcoin’s legitimacy is bolstered by institutional embrace. Corporations like Tesla, MicroStrategy, and Square hold Bitcoin on their balance sheets as a hedge against inflation. Financial giants like BlackRock and Fidelity offer Bitcoin ETFs, with the U.S. ETF approval in 2023 driving significant capital inflows. Globally, over 32,000 merchants accept Bitcoin, and 38,000 crypto ATMs facilitate access, with Los Angeles leading at 1,710 ATMs. Cities like Sydney, Hong Kong, and Chicago also rank high for Bitcoin adoption, with robust blockchain ecosystems.

Economic Case for Bitcoin

Bitcoin’s fixed supply of 21 million coins positions it as a scarce asset, often called “digital gold,” contrasting with fiat currencies prone to inflation. Global debt reached $305 trillion in 2024, per the IMF, fueling interest in Bitcoin as a hedge. In regions like Venezuela, Zimbabwe, and Lebanon, where hyperinflation erodes trust in fiat, Bitcoin serves as a store of value and medium for remittances, which are cost-effective compared to traditional services. Africa and Latin America show high Bitcoin trading volumes, with Nigeria and Russia transacting $400–420 million in 2020.

Addressing the Critics

Critics highlight Bitcoin’s volatility, energy use, and illicit associations, but these are increasingly mitigated:

  • Volatility: While significant, Bitcoin’s volatility has decreased over time as liquidity grows.

  • Energy Use: Bitcoin mining consumes energy comparable to traditional finance or gold mining. Over 50% of mining used renewables in 2024, and innovations like the Lightning Network reduce transaction energy costs.

  • Illicit Activity: Blockchain’s transparency limits sustained criminal use. Chainalysis reported illicit transactions at 0.5% of Bitcoin’s volume in 2023, down significantly, with cash remaining the primary medium for crime.

A Cultural and Philosophical Shift

Bitcoin embodies a movement challenging centralized control over money. Its “be your own bank” ethos resonates post-2008 financial crisis, empowering individuals in restrictive financial systems. The global Bitcoin community—developers, educators, and enthusiasts—drives innovation, with conferences and DeFi applications expanding its ecosystem.

The Road Ahead

Bitcoin’s legitimacy is not about replacing fiat but complementing it with freedom, transparency, and scarcity. In 2025, 33 of 60 major economies fully legalize crypto, with 70% updating regulations. From El Salvador’s pioneering adoption to U.S. states like Utah and Texas embracing reserves, Bitcoin is reshaping finance. While bans persist in outliers like China, global adoption trends—evident in Panama’s tax payments and Japan’s reserve proposals—suggest Bitcoin’s legitimacy is irreversible. As nations and states integrate Bitcoin, it stands as a geopolitical asset, a technological marvel, and a symbol of economic sovereignty.

Sources: Information compiled from web sources and posts on X, including Investopedia, CoinGecko, Forbes, Decrypt, and Cointelegraph, as cited.