At the Kapıkule border crossing between Bulgaria and Turkey, bitcoin is not accepted as a form of payment for the mandatory visa application fee. The Taihuttus, however, were not deterred.
The Dutch family of five parked their bitcoin-branded VW California T6 camper van on the shoulder of the D.100 state highway, determined to find a way to pay for their passage with the cryptocurrency.
For four years, the family has subsisted on bitcoin alone. After liquidating all their assets, from their retirement accounts and cars, to their clothes and toys, they bet it all on the volatile cryptocurrency, back when it was $900 a coin in 2017.
They also made a vow to never pay for another service or good ever again, unless the transaction was somehow made in bitcoin.
“We waited until we found a person who was willing to accept bitcoin,” said Didi Taihuttu, patriarch of the so-called Bitcoin Family.
After educating this traveler about the merits of the cryptocurrency, they installed a bitcoin wallet on his phone and made an exchange of bitcoin for cash.
“With the cash, we bought our visas,” continued Taihuttu. “It led to some yelling inside the car. I can tell you that my wife and my kids were not happy. But if you try to live the bitcoin life, you have your ups and downs.”
The most bitcoin-friendly cities on the planet
Since the Taihuttus went all in on bitcoin in 2017, they have traveled to forty countries. Mass adoption of cryptocurrencies over the past few years has made it easier for the family to transact solely in bitcoin, but to get by, they have also had to get creative.
Through a combination of bartering, bargaining, bitcoin debit cards, and convincing vendors to accept the cryptocurrency, the family has managed to traverse much of Europe, Asia, and Oceania.
But they say there are two places on the planet where you can pay for literally everything using bitcoin: the Slovenian capital of Ljubljana and a small Italian village called Rovereto.
In Ljubljana, they paid for things like car repairs and cinema tickets in the cryptocurrency, and in Rovereto, it is possible to buy a motorbike, pay your taxes, or get a haircut using bitcoin.
“I always said to people, ‘I’m never going to cut my hair till I find a hairdresser that accepts bitcoin,'” said Taihuttu. “And then I walked into this hairdresser, and he was accepting bitcoin. I was like, ‘Oh, no, I need to cut my hair!'”
For Didi, the fact that both a very small traditional village and the capital of a country had whole-heartedly embraced bitcoin was a sign to him that it was possible anywhere.
“In my opinion, any country, any city in the world, can have the same adoption of bitcoin as a store of value, or payment, or peer-to-peer cash,” explained Taihuttu. “This is what keeps driving us to explore the world.”
Spending vs. sitting on your bitcoin
The price of bitcoin reached an all-time high on Monday, as it closed in on $20,000, and some analysts say the cryptocurrency still has a lot of room to run higher.
Mike Novogratz, CEO of investment firm Galaxy Digital, thinks this comeback rally is only just getting started. He sees bitcoin rising to $60,000 by next year.
Tom Fitzpatrick, global head of CitiFXTechnicals, said the charts signaled that bitcoin could reach $318,000 by December 2021, in a report meant for Citibank’s institutional clients and obtained by CNBC.
With these sky-high predictions, it is not surprising that more investors are choosing to store their bitcoin, rather than spend it.
The number of accounts buying more than a million dollars worth of bitcoin and then moving it off the exchanges is up 180% from 2017 to 2020, according to Chainalysis, a blockchain forensics firm. And data from Glassnode shows that 95% of bitcoin’s market capitalization is held in wallets that hold more than one bitcoin.
Data points such as these also point to the fact that wealthier investors are getting their skin in the game. 2017’s bitcoin rally was largely led by retail speculation, but in 2020, it is the billionaires and corporations that are buying bitcoin in bulk, and in some cases, moving it offline for security.
“I am seeing much more interest [in bitcoin] this year than in 2017,” said certified financial planner Douglas Boneparth, founder and president of Bone Fide Wealth. “It’s not a buzzword anymore. It’s proving more and more to be a legitimate asset by both investors and institutions.”
Is it a currency or a commodity?
As more investors choose to hold onto their bitcoin, it begs the question: Is bitcoin a currency or a commodity?
It can be used to buy, sell, and price goods, and big fintech players like PayPal now allow users to pay for purchases with bitcoin.
So yes, it is a currency.
But bitcoin also behaves a lot like gold and oil. Its value is highly volatile, there is a marketplace where it is bought and sold, and similar to other commodities, you can speculate on the future price of bitcoin through the derivatives market. Plus, in 2015, the Commodity Futures Trading Commission officially classed bitcoin as a commodity in the U.S.
Bitcoin, therefore, fits both definitions.
Even Taihuttu, who has spent nearly half a decade using bitcoin as his sole means of currency believes that the role of the coin is fundamentally changing.
“I believe bitcoin is slowly becoming more a store of value,” explained Taihuttu. “We see bitcoin as a brick of digital gold that stores value, and sometimes, tremendously increases in value, but you can also take that brick of gold into a store and pay with it.”