Bitcoin: Value Consensus and Future Outlook of 12 Years Journey

Bitcoin has come a long way since its inception in 2009, marking 12 years of existence. This decentralized blockchain coin was proposed by Satoshi Nakamoto after the financial crisis, aiming to address the flaws of centralized monetary systems. As stated by a major financial institution, a phenomenon that has sustained for 12 years cannot simply be regarded as a bubble.

Recently, Bitcoin has once again become the focus. On January 8, 2021, its price broke through the 40,000 USD mark, reaching a historical high of 41,940 USD, doubling in value in just over a month. On January 15, Bitcoin again touched the 40,000 USD high, and this series of new high records greatly invigorated the cryptocurrency market.

According to a certain data platform, as of January 20, the price of Bitcoin fluctuated around $35,000. This fluctuation is within expectations, mainly due to its decentralized and anonymous characteristics, which result in a relatively loose market restriction. Data shows that the average daily volatility of Bitcoin is 3.75%, and it experienced an extreme situation with a single-day drop of over 50% on March 12, 2020.

Institutional Entry: A New Support for Bitcoin Stability

Compared to the retail-driven bull market of 2017, the current market is more driven by institutional investors. Data from a blockchain monitoring platform on January 12 showed two large transfers, one for 9060 BTC (approximately $327 million) and another for 17283 BTC (approximately $616 million). Between January 11 and 15 alone, 65 large transfers were monitored, 19 of which came from anonymous wallets, totaling 92201 Bitcoins, worth approximately $3.5 billion.

As of January 15, 2021, there are 100 Bitcoin addresses globally with a balance exceeding 10,000 BTC, accounting for 13.6% of the total circulation. If we include addresses holding 1,000-10,000 BTC, only 0.00695% of addresses control 42.5% of the Bitcoin. This data indicates that institutional investors are gradually becoming important participants in the market, influencing the future direction of Bitcoin alongside long-term holders.

Bitcoin's Core Advantages

1. Security

The design of Bitcoin, from the underlying transaction logic to blocks, timestamps, and other aspects, aims to strengthen the trust mechanism. Theoretically, only by controlling 51% of the computing power can one break the system, and the countless failed attacks over the past 12 years are the best proof of its security. Currently, private key management has become the weakest link in the security chain.

2. Scarcity and Non-replicability

The total supply of Bitcoin is capped at 21 million, and it is expected to stop mining by the year 2140. This artificially set scarcity makes it a unique digital asset. As of now, approximately 3.7 million Bitcoins (20% of the circulating supply) have permanently disappeared due to lost private keys, further enhancing the scarcity value of the existing Bitcoins.

Market Characteristics and Future Outlook

The Bitcoin market exhibits significant volatility due to its decentralized and anonymous characteristics. Unlike traditional financial markets, there are no limits on price increases or decreases, nor are there circuit breakers; it is entirely driven by market forces.

Currently, mainstream financial institutions show a clear divergence in their attitudes towards Bitcoin, ranging from extreme opposition to strong support. Some believe that regulations will determine the fate of Bitcoin, while others predict that stablecoins may replace Bitcoin. However, the 12-year development history has proven that Bitcoin has strong vitality.

Although external factors may have a significant impact on Bitcoin, these effects highlight the value of Bitcoin rather than determining its survival. As a new asset class, the future development of Bitcoin is still worthy of continuous attention and in-depth research.