Bitcoin, the 'virtual currency' born in 2009, has transformed from an 'experiment' in the hands of tech geeks into 'digital gold' in the global financial system in just fifteen years.
If someone had told you ten years ago that Bitcoin would become an asset fiercely contested by today's Wall Street financial giants, you might have laughed it off. But by 2024, with Bitcoin prices soaring to $100,000, it no longer seems surprising.
The story of Bitcoin is not just a revolution of wealth but also a mirror reflecting the intertwining of economy, technology, and policy in this era.
The past and present of Bitcoin: origins and early development, from the fringe to the mainstream.
Do you remember the original Bitcoin? It was like an 'underground currency' quietly growing online, used by tech enthusiasts for experimental trading. At that time, it was insignificant and even regarded by many as a scam.
However, this decentralized currency quickly attracted those who were disillusioned with the traditional banking system, becoming a symbol of resistance against financial control. In 2010, one Bitcoin could only be exchanged for a pizza, but today it is worth $100,000.
This dramatic increase is not coincidental but rather the result of a complex interplay of technology, policy, market, and human nature.
2024's major turning point: the launch of spot ETFs opens the door for institutional entry.
In 2024, Bitcoin welcomed a historic year. At the beginning of the year, the U.S. Securities and Exchange Commission (SEC) approved the listing of 11 Bitcoin spot ETFs. This decision completely changed the market landscape for Bitcoin. In the past, Bitcoin was mainly dominated by retail investors, with prices fluctuating wildly and uncontrollably.
The launch of spot ETFs has opened the door for institutional investors. From endowments to pensions, from hedge funds to family offices, almost all traditional financial institutions are flooding into the Bitcoin market. This influx of funds is no longer scattered speculation but rather a strategic long-term layout.
Data shows that these ETFs attracted over $30 billion in funds in just a few months, giving the Bitcoin market a 'regular army'.
Trump's policy shift: an unexpected boost for Bitcoin, becoming its spokesperson.
At the same time, changes in policy have become an important driver of Bitcoin's price surge. In the 2024 U.S. presidential election, Trump changed his previous stance against cryptocurrencies and became a spokesperson for Bitcoin.
He publicly promised to make the U.S. the 'capital of cryptocurrency' and even proposed the establishment of a national Bitcoin reserve. These statements greatly boosted market confidence and led to Bitcoin's price breaking through $80,000 and $90,000 after Trump's victory, ultimately exceeding the $100,000 mark by the end of the year.
Trump's policy shift may not merely be a market coincidence, but the result of strategic intervention by the cryptocurrency industry. Reports suggest that Trump's campaign team accepted over $200 million in political donations from cryptocurrency companies, reflecting the industry's efforts to gain influence through political channels.
The trend of institutions and enterprises 'stockpiling' Bitcoin: Bitcoin is favored and has become an important part of asset allocation.
As Bitcoin is gradually accepted by mainstream financial markets, a large number of institutions and publicly traded companies have also joined the ranks of 'stockpiling' Bitcoin.
The U.S. publicly traded company MicroStrategy has announced about 40 Bitcoin purchase announcements over the past four years and currently holds over 400,000 Bitcoins, accounting for approximately 1.5% of the global supply. This not only makes MicroStrategy the largest publicly traded holder of Bitcoin but also caused its stock price to soar by 477% in 2024.
Not just MicroStrategy, over 60 publicly traded companies worldwide have invested in Bitcoin, including Japan's Metaplanet and Germany's Samara Asset Group. For these companies, Bitcoin is not just an investment tool, but an important part of their asset allocation.
At the same time, institutional investors are adopting more long-term investment strategies. Data shows that the reserves at Bitcoin exchanges have hit historic lows, reflecting that more and more investors prefer to transfer Bitcoin to offline wallets for long-term holding.
This behavior further reduces the circulating supply in the market, providing support for price increases.
Additionally, China still holds an important position in the global cryptocurrency mining landscape. If Chinese policies loosen (such as reopening cryptocurrency exchanges), the Bitcoin market may experience greater momentum.
The risks and challenges of Bitcoin: halving mechanism, high volatility, and policy risk.
However, all this comes at a cost. The surge in Bitcoin's price has sparked market frenzy, with some believing it could become a 'huge bubble' again. Although it has transitioned from retail to institutional market, Bitcoin's high volatility remains an undeniable issue.
In 2024, 'liquidation' events are commonplace in the market, causing many overly aggressive investors to incur losses. Meanwhile, global policy regulation concerning Bitcoin remains fraught with uncertainty. For example, the stance of the U.S. Securities and Exchange Commission has changed, but the policy directions of other countries, such as China and Europe, could become future risk points.
Especially in China, despite severe crackdowns on Bitcoin mining and trading in recent years, the market potential remains immense. If policies are relaxed, it could have a significant impact on Bitcoin's price.
Setting aside the market frenzy, the mechanism of Bitcoin itself is also worth reflecting on. In April 2024, Bitcoin completed its fourth halving, with mining rewards decreasing from 6.25 to 3.125 coins. The halving mechanism is designed as a means of anti-inflation, but it also raises the operating costs for miners.
With fluctuations in global energy prices and increased mining difficulty, the sustainability of the Bitcoin ecosystem has become an issue that cannot be ignored. If Bitcoin is to truly become a long-term store of value, balancing its high energy consumption with economic value may be a core challenge that needs solving in the future.
Of course, the significance of Bitcoin has long transcended that of a mere digital currency. Its scarcity, decentralized nature, and anti-inflation capabilities make it a safe-haven asset in the context of geopolitical and financial turmoil. As a result, both financial institutions and enterprises, as well as some sovereign nations, are scrambling to accumulate Bitcoin.
The U.S. publicly traded company MicroStrategy is a typical example; this company has transformed Bitcoin into its core asset through continuous purchases, even driving a significant rise in its stock price. Currently, MicroStrategy holds 1.5% of the global Bitcoin supply, and this trend is being imitated by more publicly traded companies.
Bitcoin in 2025: redefining economics, with attention on the asset tokenization model.
Where will Bitcoin go in 2025? Some believe it will continue to rise, possibly reaching historical highs of $180,000 or even $200,000. However, more investors and experts suggest maintaining a rational approach to Bitcoin. After all, Bitcoin's high volatility and policy risks always loom over investors like a sword. BlackRock noted in a report that the allocation of Bitcoin in an investment portfolio should be kept at 1%-2% to mitigate risks from market fluctuations.
In addition, stablecoins and asset tokenization are also seen as important growth points for the future cryptocurrency market. In 2024, the global market value of stablecoins reached approximately $200 billion, and by 2025, this figure may exceed $300 billion. An increasing number of large tech companies and payment networks are beginning to adopt stablecoins, redefining payment economics. Meanwhile, the asset tokenization model is also gaining attention worldwide, and this blockchain-based financial innovation may become key to the integration of cryptocurrency and traditional financial markets.
The story of Bitcoin is far from over. For ordinary investors, the most important thing is not to chase its price peaks but to understand the logic and value behind it.
In such a changing era, Bitcoin may just be the beginning, while real transformation is still on the way.