Bitcoin in Question: The End of the Dream of a Currency Without a State?

Published in Les Échos , December the 3d , 2025

In early October, and over several weeks, Bitcoin—the emblem of cryptocurrencies and the flagship of a libertarian utopia—experienced a brutal decline: its price fell from nearly €106,000 to €73,000, a drop of about 30% in less than two months, before partially recovering. Over this period, more than $1 trillion in market capitalization vanished from the crypto market as a whole, affecting not only Bitcoin but all major cryptocurrencies such as Ether, Solana, and XRP.

This dramatic volatility highlights the intrinsic fragility of these private, decentralized “currencies,” which rely solely on algorithmic trust rather than on institutional foundations. The dream of a universal, non-national currency able to escape government control had appealed to many advocates of an economy free from state regulation, following in the footsteps of Hayek and the Austrian school. Bitcoin was explicitly designed to counter the monetary manipulation associated with official currencies. The prospect of large, seemingly easy gains also attracted many newcomers.

But this shock exposes the purely self-referential basis of the value of these so-called currencies, which have no underlying economic counterpart—unlike bank money, which is backed by credit to the economy. This makes them hyper-speculative, deeply volatile crypto-assets, whose value bears no relation to real economic needs and is subject to no institutional regulation.

The recent sharp swings thus illustrate a key point: money is never simply a technical object; it is an institutional and social fact. Unlike bank money, which rests on confidence in banks, central banks and states, cryptocurrencies are backed by no “official” institution and therefore depend solely on the collective trust of their holders—trust that can evaporate suddenly. The immediate causes of the decline are multiple: fears of an excessively steep prior rise, reduced expectations of imminent interest-rate cuts in the United States, massive liquidations of highly leveraged positions, risk reduction by institutional investors, and regulatory uncertainty, among others.

Given such volatility, cryptocurrencies cannot impose themselves as a universal means of payment; they remain, de facto, objects of pure speculation, with no objective value external to the crypto market itself. They are therefore highly susceptible to episodes of euphoric exuberance as well as panic and flight. Beyond the philosophical debate between “algorithmic trust” and institutional trust—mirroring the profound differences between the libertarian and the institutionalist schools—the recent sequence marks a return to reality: without the anchoring of institutions, whether visible or invisible, capable of channeling uncertainty and conflict, no currency can sustainably fulfill its role as social and economic mediator, nor ensure the expected stability or efficiency. The promise of Bitcoin and its successors as currencies thus cannot escape the fundamental question faced by any form of money: its universal acceptance depends less on its technology than on its capacity to preserve the trust on which it rests. Failing that, they are nothing more than hyper-speculative objects.

Private currencies can replace “official” currencies only if the latter suffer from profound and prolonged institutional failures—whether state or central-bank failures—leading to a collapse of trust. As of today, the market has reminded us—at least for the moment—that the anarcho-capitalist utopia represented by cryptocurrencies as currencies remains, above all, a utopia.

Olivier Klein
Professor of Economics at HEC
CEO, Lazard Frères Banque