Author: Zhou Zhou, Foresight News
Bitcoin breaks through $100,000, and this may just be the starting point.
At 10:00 on December 5, 2024, Bitcoin officially broke through $100,000.
In the past year, BTC has increased by more than 2 times; in the past three years, BTC has increased by nearly 6 times; in the past five years, BTC has increased by nearly 20 times; in the past ten years, BTC has increased by 500 times; in the past fifteen years, that is, starting from Bitcoin Pizza Day, BTC has increased by 40 million times... For sixteen years, Bitcoin has been at a new starting point.
Over the past 16 years, Bitcoin has been attacked by governments and then gradually accepted and even publicly supported by governments. It has been questioned by the public time and again and then held by more people. In 2024, the number of users of the cryptocurrency exchange Binance alone exceeded 210 million. Every time people thought that Bitcoin had reached a high point and was about to reach the end, it was proved to be just a new starting point.
The narrative and meaning of Bitcoin itself are also constantly evolving, and people's views on Bitcoin are also constantly changing.
Fifteen years ago, it was just a small experiment by cryptographers. A programmer in Florida, USA, used 10,000 bitcoins to buy two pizzas. Ten years ago, it was just a payment method that provided a breeding ground for illegal transactions such as gambling, drugs, and money laundering. Most of its usage scenarios were illegal transactions. Five years ago, together with the cryptocurrency industry, it gradually grew into a new financial system. To describe it in a far less precise way, there is a "crypto Nasdaq" (Ethereum), a "crypto bank" (Tether, Ethena), a "crypto securities company" (Binance), an account system (Metamask)... Each product has tens of millions or even hundreds of millions of users. It has almost all the infrastructure and products of the traditional financial industry, and it is more efficient, streamlined, transparent, decentralized and globalized. Three years ago, the cryptocurrency industry was no longer limited to financial scenarios, but expanded to Web3 application scenarios, so the next generation of financial system + the next generation of Internet system became its new mission.
Today, more people believe that Bitcoin is gold. The market value of Bitcoin has reached 2 trillion US dollars, surpassing the market value of silver and one-tenth of the market value of gold. Bitcoin is recognized and supported by many sovereign countries such as the United States and Japan. And this process took Bitcoin only 16 years. What is even more amazing is that the blockchain technology behind Bitcoin has also derived a whole set of new financial ecology and Internet ecology. Thousands or even tens of thousands of encryption institutions in these two ecosystems continue to promote the popularization of Bitcoin, making it possible for Bitcoin to become a global currency.
When Bitcoin reached a high of $100,000, everyone asked a common question: Is Bitcoin nearing the end? How far is Bitcoin from the end? Will there be a new narrative for Bitcoin?
5 billion people on the Internet have not yet been exposed to Bitcoin
$100,000 is still the starting point for Bitcoin, and this time Bitcoin will welcome new “buyers”.
The biggest new buyers this year are undoubtedly BlackRock, the world's largest fund, and the main buyers behind BlackRock and other funds - American companies and institutions.
In January 2024, the United States passed the BTC ETF, which means that U.S. listed companies, pension funds, BlackRock Fund, Stanford and other university funds and other institutions can publicly purchase and hold Bitcoin through ETFs issued by BlackRock and other funds. The passage of the U.S. Bitcoin ETF has set off a wave of large American institutions buying Bitcoin. Large companies around the world are rushing to buy Bitcoin. In 10 months, BTC ETF has inflowed $100 billion, and tens of billions of dollars are bought into Bitcoin through U.S. fund companies almost every month.
Bitcoin also soared from more than $40,000 to $100,000, largely due to the approval of the US BTC ETF, which allowed US institutions to buy Bitcoin through legal channels such as ETFs. The approval of the US BTC ETF and the subsequent 10-month data performance have become a miracle in the history of ETFs.
If Bitcoin goes from $100,000 to $200,000, which new buyers will come in?
First of all, from an institutional perspective, the institutions that currently purchase Bitcoin are still mainly in the United States. The U.S. Bitcoin spot ETF is still rapidly attracting capital inflows at a scale of tens of billions of dollars per month, with no signs of stopping. Companies and institutions in the United States and around the world will still purchase Bitcoin through the Bitcoin spot ETF.
From a global perspective, major economies such as Japan, Europe, and China have not yet completely lifted restrictions on institutional purchases. Once the major economies lift restrictions, it will be another leap forward. According to the famous "time machine theory", innovative assets and innovative mechanisms tend to spread from the United States to developed countries and finally to developing countries. Whether it is in the asset and financial fields: gold, Nasdaq listing mechanism, SPAC listing mechanism, or the Internet, chips, mobile phones, and new energy vehicles in the pan-tech field, they often follow the time machine theory.
Secondly, from the perspective of ordinary people, the popularity of Bitcoin is far from enough. According to estimates by a16z, a well-known Silicon Valley investment institution, through various methods, the current global monthly active cryptocurrency users are about 30 million to 60 million. Even if this range is expanded to users who have held cryptocurrency, according to an analysis by Crypto.com in April 2024, there are 610 million cryptocurrency users worldwide. The world's population is 8.2 billion, of which 5.4 billion use the Internet, and about 5 billion of these Internet users have never experienced cryptocurrency products.
What the cryptocurrency industry hopes to achieve is to form a new global financial system and Internet system, so that everyone can use cryptocurrency products like Internet products. In 2024, there will be 5.4 billion people using the Internet, but there will only be 610 million cryptocurrency users, which means there is a huge incremental market. The cryptocurrency industry is changing this situation, and it is changing the financial system and the Internet system.
And when the cryptocurrency industry becomes as popular as the Internet industry is now, Bitcoin will reach ten times the current population.
Finally, there is an even more critical buyer: sovereign states.
After El Salvador, Bitcoin is expected to become a reserve asset for more and more sovereign countries. Especially after Trump was elected as the US President, major economies such as China, the United States, Japan, Europe, and the United Arab Emirates are expected to accelerate the use of Bitcoin as a national reserve asset, which will bring Bitcoin another leap forward.
It is not groundless that major countries are personally buying Bitcoin. On November 22, Reuters reported that Trump’s “Cryptocurrency Advisory Committee” is expected to set up a promised Bitcoin reserve.
Trump has publicly supported Bitcoin and the cryptocurrency industry on many occasions. During the campaign, Trump promised a number of measures to support cryptocurrencies, such as including Bitcoin in the national reserve, making the United States the world's cryptocurrency capital, and relaxing regulations. Trump's proposal has been supported by some political and industry experts. For example, U.S. Senator Cynthia Lummis has proposed a bill to establish a strategic reserve of Bitcoin, with the goal of acquiring 1 million BTC within five years and holding it for at least 20 years to hedge the U.S. national debt.
When the United States uses Bitcoin as a reserve, most countries in the world are expected to allocate a corresponding proportion of Bitcoin assets, just like gold.
In short, whether it is the 5 billion Internet population, the Bitcoin spot ETF mainly bought by institutions with a continuous inflow of US$10 billion per month, or sovereign state funds, they will all be potential buyers of Bitcoin and the key "buyers" for Bitcoin to rise from US$100,000 to US$200,000.
$100,000, just getting started
$100,000 is just the starting point for Bitcoin. If Bitcoin wants to rise from $100,000 to $200,000, it will not only need new buyers, but also a new group of believers and builders to expand Bitcoin's reach.
Cryptocurrency practitioners may be one of the most exploratory groups in the world.
They not only need to understand the development of various blockchain technologies such as ZK, but also the new technological trends in various technology industries such as AI, VR, and the metaverse; they not only need to have an in-depth understanding of US politics and elections, the timing and extent of the Federal Reserve's interest rate cuts, and the cryptocurrency policies of Hong Kong and Singapore, but also need to pay close attention to various macro events such as wars, economic crises, and stock market fluctuations; they need to understand the differences between public chains such as Bitcoin, Ethereum, Solana, Sui and Base, and they must also be familiar with concepts and tracks such as Web3 social, Web3 games, DeFi, NFT, etc.
From ICO, to DeFi, to NFT, and now to Mass Adoption, cryptocurrency practitioners are constantly expanding the boundaries of blockchain networks, allowing cryptocurrency assets such as Bitcoin to truly circulate around the world and generate value.
Many people ask, what is the meaning of Bitcoin and cryptocurrency? Why are so many people joining the cryptocurrency industry?
I often answer that when the value of Argentina's national currency shrinks by more than 50% every year, companies such as Binance and Tether provide Argentines with stablecoins to protect their property from shrinking significantly. This is the meaning of Bitcoin's existence; when people want to transfer money to family and friends across countries, but the traditional economic and political systems have set up layers of obstacles for this, which not only requires high handling fees but also extremely long waiting times. This is the meaning of Bitcoin's existence; when as an entrepreneur of a startup company, it is difficult to cooperate directly and at low cost with employees from several or even dozens of countries with different currencies and systems under the existing system, this is the meaning of the existence of Bitcoin, cryptocurrency and blockchain.
Bitcoin has created value and is constantly exploring the possibility of creating new value. From building a new financial system to building a new Internet system, only a small part of this road has been completed, and new builders still have a long way to go.
Last words
During the Republic of China period, the first thing university professors did after receiving their salary was to run to the rice shop to buy rice, because the price would go up an hour later.
Such things happen all the time, generation after generation, and in every corner of the world. Some countries have milder symptoms, such as China, Japan, and the United States, some countries have more severe symptoms, such as Argentina, and some countries may have worsening symptoms at any time, such as Russia and Ukraine.
Every person has a good side and a bad side. The existence of a country has both good and bad sides.
The emergence of the Internet has made it impossible for most countries to block news at will, thus combating the evil side of the country; the emergence of Bitcoin has made it impossible for most countries to issue currency at will, thus combating the evil side of the country.
The country cannot stop Bitcoin because Bitcoin is just a technology and a tool. As Russian President Vladimir Putin said at the Russia Calling forum on December 4, "Who can ban Bitcoin? No one can. Who can ban the use of other electronic payment methods? No one can either. Because these are new technologies."
This is why the price of Bitcoin can reach 100,000 U per coin.
This is why $100,000 is still just the starting point for Bitcoin.
