Recently, Bitcoin successfully broke through the 100,000 USD mark, reaching a high of 104,000 USD. The entire cryptocurrency market has been reignited, and the 100,000 USD Bitcoin has triggered countless retail investors' FOMO (Fear of Missing Out).
So the question arises: Can we still buy Bitcoin at the high of 100,000 USD and see it appreciate?
(Disclaimer: Investing involves risks, and you should proceed with caution. All the following content is for reference only; please make your decision after independent consideration.)
First, I want to briefly review the history and concept of Bitcoin with you. Only by understanding the basic concept of Bitcoin can you see the value behind the concept and truly think clearly: Can a Bitcoin at 100,000 USD really be bought?
Be patient and keep watching; there will surely be rewards.
When talking about the history of Bitcoin, we cannot ignore the financial crisis of 2008. At that time, the global financial system collapsed, and to save the economy, the Federal Reserve and central banks around the world adopted extremely loose monetary policies, printing money and flooding the market to solve the short-term economic crisis. Although this approach can address short-term crises, indiscriminate money printing and relying solely on quantitative easing as a lifeline will only result in an increasing amount of money circulating in the market, diluting the value of fiat currency, meaning money becomes increasingly worthless.
During this period, a historically great financial revolution was born, initiated by an anonymous figure—Satoshi Nakamoto, who published a paper titled (Bitcoin: A Peer-to-Peer Electronic Cash System).
A currency that disrupts the traditional financial system, Bitcoin has officially been born. Unlike traditional currency systems, Bitcoin achieves complete decentralization and does not rely on centralized individuals, institutions, banks, or governments. Instead, it uses blockchain technology to allow everyone to participate in the Bitcoin monetary system, engage in Bitcoin transactions and verification, and every transaction in this system is completely transparent.
The issuance of Bitcoin is not actually controlled by a centralized institution but is generated through a process called 'mining.' Miners use computers to solve complex mathematical problems and validate every transaction in the network.
However, mining is not free. Miners need to consume a large amount of electricity and computing resources to mine, which means that mining costs are substantial, and this also partially determines the base price of Bitcoin. As more people participate in mining, the difficulty will gradually increase, because only one person can mine Bitcoin every 10 minutes, which will further drive up the price of Bitcoin.
Bitcoin also has an important feature: the halving mechanism. Every four years, the Bitcoin mining reward is halved, meaning the number of Bitcoins mined by miners will be reduced by half. The mining reward at the inception of Bitcoin was 50 coins, but on April 20, 2024, Bitcoin will undergo its fourth halving, and the mining reward will have decreased to 3.125 Bitcoins.
This mechanism gives Bitcoin a natural 'anti-inflation' property, as over time, the Bitcoin available in the market will become increasingly scarce.
It is expected that by 2140, all 21 million Bitcoins will be mined, and no new Bitcoins will be created afterward.
Bitcoin's decentralized, extremely transparent monetary system, limited supply, and natural anti-inflation property have led to Bitcoin increasingly being regarded as 'digital gold.'
A one-sentence definition of Bitcoin's value: The lower limit of fiat currency is the upper limit of Bitcoin; fiat currency has no lower limit, and Bitcoin has no upper limit. The halving mechanism of Bitcoin and the maximum supply of 21 million coins completely solve the inflation problem.
People might say that gold is also a safe-haven asset; why not hold gold?
Bitcoin and gold are indeed competitors, but I believe Bitcoin has many advantages that gold does not possess. For example:
1. Bitcoin can be divided; you can buy 1 Bitcoin or 0.0001 Bitcoin.
2. Bitcoin is easy to carry; it can be transferred to a small hardware cold wallet and taken anywhere for long-term holding.
3. Bitcoin has better liquidity; it can be traded continuously 24 hours a day and circulate quickly around the world through the Bitcoin network.
4. Bitcoin is not manipulated by centralized institutions, such as governments or banks; assets cannot be censored or frozen.
5. Bitcoin is a digital asset with digital attributes, which aligns with the long-term trend of technological development in the world, attracting more investors.
Moreover, Federal Reserve Chairman Jerome Powell has publicly stated multiple times that Bitcoin is a competitor to gold.
Currently, the market value of gold is 18 trillion, while Bitcoin's market value is 2 trillion. If Bitcoin's market value surpasses gold one day, then the price of one Bitcoin will likely exceed 1 million USD.
As more and more people around the world realize the value of Bitcoin, funds will continuously flow into Bitcoin, and the price of Bitcoin will naturally keep rising, continuously setting new historical highs.
Now, let's answer: Can a Bitcoin at 100,000 USD be bought? In my opinion, as long as one recognizes the long-term value of Bitcoin, any time is the best time to buy Bitcoin.
This principle applies to any investment target.
Let me give a simple example:
Suppose we turn back time to three years ago, in November 2021, when Bitcoin reached the peak of the bull market, with one Bitcoin reaching 69,000 USD, and then entered a two-year bear market. You must have had concerns then!
But if you consider the price of 69,000 USD now, would you feel it is expensive? Of course not, you might even choose to buy in without thinking. Because from today's market, Bitcoin at 69,000 USD is really too cheap; missing it won't give you another chance to get on board.
Similarly, when Bitcoin reaches 500,000, 1 million, or 2 million USD in 10 years, will you still think that the current price of 100,000 USD per Bitcoin is expensive?
Therefore, if you cannot recognize the long-term value of Bitcoin, it doesn't matter if Bitcoin is 100, 1,000, 10,000, or 100,000; you should not invest in it, unless you are merely speculating or engaging in short-term trading.
Bitcoin is something beyond your understanding, and no one can ever earn wealth beyond their understanding.
