The question then becomes whether that energy associated with Bitcoin is put to good use. Does Bitcoin justify its energy usage? Does it add enough value?

So far, the market says it does and I agree. A decentralized digital monetary system, separate from any sovereign entity, with a rules-based monetary policy and inherent scarcity, gives people around the world a choice, which some of them use to store value in, and/or use to transmit that value to others.

Those of us in developed markets that haven’t experienced rapid inflation for decades may not see the need for it, but countless people in emerging markets have experienced many instances of severe inflation in their lifetimes, tend to get the concept more quickly.

Furthermore, a significant portion of the energy that Bitcoin uses, could otherwise be wasted. Bitcoin miners seek out the absolute cheapest sources of electricity in the world, which usually means energy that was developed for one reason or another, but that doesn’t currently have sufficient demand, and would therefore be wasted.

Eoin Treacy's view

The energy to utility argument for bitcoin makes intuitive sense and willingness of investors to continue to support the asset class is a testament to the belief people have that there is intrinsic value in the network.

The long-term question is how bitcoin's role as a store of value, rather than as a transaction mechanism, will be tolerated by governments. Countries tend to be rather jealous of who gets to issue currency and tax transactions, therefore the more they migrate towards digital currencies the more they are likely to legislate against bitcoin. That’s a medium to long-term potential challenge but is not an obstacle to additional strength in the short term.

Bitcoin extended its breakout to new recovery highs today and Ethereum firmed in the region of its first step above the base.