Why has the price of Bitcoin been rising continuously?
Two words: demand. The relationship between supply and demand determines price, which is the first principle of economics. When supply cannot meet demand, prices will rise. The total supply of Bitcoin is limited to 21 million, based on the mathematical principles behind Bitcoin's creation. You can think of them as 21 million mathematical solutions. The actual number is even lower because losses from lost Bitcoins can reach 17% to 23%. On the other hand, demand is increasing.
The global financial crisis occurred in 2008 (the same year Bitcoin was born), and in 2020, the global COVID-19 pandemic took place. To stimulate economic activity and consumption, countries began to print money in large quantities. My most direct feeling is that when I go to the market to buy groceries, cash is becoming increasingly harder to spend.
More and more investors and institutions are starting to buy large amounts of Bitcoin to prevent asset depreciation. During the U.S. presidential campaign in November 2024, Donald Trump even expressed support for cryptocurrencies, promising to make the U.S. the 'global crypto capital' and proposed establishing a national Bitcoin reserve.
Additionally, Bitcoin has obvious advantages in cross-border payments. Low transaction fees.
Traditional currency cross-border payments require banks or payment platforms, which have high transaction fees, usually between 3% and 10% of the remittance amount. In contrast, using Bitcoin for payment does not require intermediaries, and regardless of the amount, the transaction fee is only $1 to $5.
Fast transactions. Traditional currency cross-border payments take at least 1 to 2 working days at best; if they involve intermediary banks or coincide with public holidays, the time can be longer, possibly up to a week. Bitcoin, on the other hand, can complete global transactions within minutes without intermediaries and is not restricted by public holidays. No limit on amounts. Traditional currency cross-border payments have limits; for example, in China, the annual limit for individuals is $50,000, whereas there are no limits when paying with Bitcoin.
Bitcoin has other advantages, such as high transparency, good security, strong censorship resistance, good liquidity, and high confidentiality. These advantages have led to a continuous increase in the demand for Bitcoin.