A Bitcoin is Enough for the Second Half of Life
The supply situation of Bitcoin is quite unique. Currently, there are about 19.79 million Bitcoins in the global market. If evenly distributed among every person on Earth, each person would receive a maximum of 0.002125 BTC, which, at today's price, would require approximately $212 to obtain an equal share. However, in reality, the distribution of Bitcoin is extremely uneven, with more and more being held by governments, insurance companies, corporations, and other entities, while the amount that individuals can obtain is rapidly decreasing.
The price trend of Bitcoin has also attracted much attention. On December 5th of this year, the price of Bitcoin broke through the $100,000 mark, reaching a historic high, with a total market value exceeding $2 trillion, making it the seventh-largest asset globally, even surpassing the combined market values of seven listed companies, including China Mobile and Bank of China. There are numerous factors behind its price increase. The "Trump Trade" has been an important driving force, as Trump repeatedly endorsed cryptocurrencies during his campaign, and after winning the election, Bitcoin entered a rapid growth phase.
Moreover, Bitcoin's four-year halving mechanism cannot be ignored. Since 2012, the mining reward for the Bitcoin network has been halved every four years. For instance, before 2011, miners would receive a reward of 50 Bitcoins for mining a block, which will be reduced to 3.125 Bitcoins after April 20, 2024. This expectation of reduced supply often triggers price increases; for example, in May of this year, the price of Bitcoin rose by about 20% due to this.
At the same time, the emergence of Bitcoin ETF funds has increased the supply of capital. This year, a batch of Bitcoin spot ETFs has been issued in capital markets like the US and Hong Kong, which have low investment thresholds and strict regulations, making them popular among mainstream investors.
Additionally, the end of the Federal Reserve's rate hike cycle has contributed to this trend. On September 18, 2024, the Federal Reserve lowered interest rates by 50 basis points for the first time since 2020, ending a rate hike cycle of 525 basis points. The released liquidity adds to economic uncertainty, prompting more investors to choose Bitcoin as a hedge against risk.
