Bitcoin continues to demonstrate significant price increases. On domestic trading platforms, Bitcoin trading closely resembles stock trading. It operates on a T+0 basis, has no price limits, and runs 24/7. These platforms offer five-level bid-ask quotes, real-time transaction data, and K-line charts. Previously, some platforms provided leveraged trading with margin services, supporting up to 5x leverage. However, regulatory intervention has halted these leveraged services.
From its inception in 2009, Bitcoin’s value has surged remarkably. Initially, one dollar could buy over 1,300 Bitcoins. By December 4, 2013, it reached a then all-time high of $1,147. Recent statistics show a 267% increase over the past year, 740% over two years, and an astounding 113.3 times over four years.
Why does Bitcoin’s price keep rising? According to a report from China Merchants Securities analyst Liu Zejing’s team, two main reasons exist. First, economic uncertainties in some regions drive investors toward Bitcoin as a hedge. Second, growing public understanding and interest in Bitcoin and blockchain technology fuel adoption. These factors reinforce each other: choosing Bitcoin for避险 reflects its increasing legitimacy.
Song Jiaji, Chief Communications Analyst at Guotai Junan Securities Research Institute, highlights Bitcoin’s fixed supply of 21 million coins, enforced by code. As an investment, it boasts scarcity, non-renewability, and a substantial market presence. Its current market capitalization exceeds $50 billion, with daily trading volumes over $1 billion.
Global Trading Volume: Japan Leads
Yao Zhijie, COO of domestic exchange FreeWil-lex, reported steady growth in user registrations and trading volume. Their platform has seen a tenfold increase, with referrals jumping from 3,500 last year to over 12,000 currently.
Huobi data reveals Japan dominates global Bitcoin trading volume at 46.4%. The US follows at 26.4%, while China ranks third at 10%. Previously, China accounted for 80%-95% of total trading volume.
Industry experts note that investors from China, Japan, and South Korea primarily drive Bitcoin’s price surge. CryptoCompare data indicates prices in Japan and Korea often exceed the global average by over $300. For instance, Japanese exchange bitFlyer quoted prices as high as 333,200 yen (approximately $2,998).
Yao Zhijie emphasizes Bitcoin’s inherent scarcity and superior流通便利性. Blockchain’s decentralized nature ensures transparency and security for交易双方. As Bitcoin’s applications expand, familiarity and demand grow accordingly.
Government attitudes remain crucial for Bitcoin’s investment value. Initially, many governments viewed it with skepticism, but perspectives are evolving.
In late June 2013, Germany’s parliament exempted long-term Bitcoin holdings from taxes, recognizing it as a “unit of account.” In August 2013, US District Judge Amos Mazzant ruled Bitcoin a currency under financial regulations in a case involving a virtual hedge fund.
Song Jiaji mentions that domestic regulators restricted withdrawals from local exchanges earlier this year. Since June 1, major platforms like OKCoin and Huobi have allowed limited withdrawals. However, Bitcoin’s decentralized nature poses ongoing regulatory challenges.
Digital Gold or Speculative Bubble?
Bitcoin’s popularity has boosted competing virtual currencies like Ethereum and Litecoin, both experiencing staggering gains. OKCoin data shows Litecoin rising from under 25 yuan to 253.98 yuan per coin.
On May 31, Huobi and OKCoin announced support for Ethereum trading. Coinbase data indicates Ethereum’s price remained stable until March, then surged. Between May 18 and May 25, it jumped from $89.5 to $195.27, a 118% increase.
With Bitcoin prices high, investors seek alternatives. On May 22, Ethereum ranked 18th in US Google searches, nearly matching Bitcoin’s popularity.
Yao Zhijie asserts Bitcoin’s foundational role in blockchain assets. Despite new competitors, its pioneering status remains firm. Although its technology faces challenges, ongoing blockchain innovations continuously rejuvenate Bitcoin.
Opinions on Bitcoin are polarized. Some hail it as “digital gold” for its scarcity and黄金媲美 properties. Others fear it’s a speculative bubble.
Yao Zhijie explains Bitcoin’s fixed supply of 21 million coins, with halving events reducing production. Without a corresponding increase in computing power, supply declines while applications grow. For example, merchant acceptance expands use cases, currently preventing supply-demand imbalance.
Song Jiaji warns of Bitcoin’s high volatility due to 24/7 trading without price limits, posing significant risks. However, beyond speculation, its underlying blockchain technology holds long-term promise.
He believes blockchain technology offers vital insights for digital currencies. Bitcoin’s eight-year secure operation provides a simplified case study for future state-backed digital currencies. Additionally, Bitcoin’s token concept spurred Initial Coin Offerings (ICOs), where communities issue tokens for project funding. Compared to traditional venture capital, ICOs reduce information asymmetry and improve efficiency. Though still nascent, ICOs warrant reasonable regulation.
Frequently Asked Questions
What makes Bitcoin’s price so volatile?
Bitcoin trades 24/7 globally without price limits, leading to high volatility. Market sentiment, regulatory news, and technological developments significantly impact its price. Its relatively small market size compared to traditional assets also amplifies price swings.
How does blockchain technology support Bitcoin?
Blockchain is a decentralized ledger that records all Bitcoin transactions transparently and securely. This technology ensures that no single entity controls the network, enhancing trust and reducing fraud. Its innovative design is the foundation of Bitcoin’s functionality.
Can Bitcoin be used for everyday purchases?
Yes, some merchants accept Bitcoin as payment, though adoption is still growing. Its use for everyday transactions depends on factors like transaction speed, fees, and regulatory acceptance. Developments like the Lightning Network aim to improve its practicality for small purchases.
What are the main risks of investing in Bitcoin?
Risks include extreme price volatility, regulatory changes, cybersecurity threats, and market manipulation. Investors should only allocate funds they can afford to lose and consider diversifying their portfolios to mitigate potential losses.
How does Bitcoin’s limited supply affect its value?
With a fixed supply of 21 million coins, Bitcoin is designed to be deflationary. This scarcity can drive value appreciation if demand increases, similar to precious metals like gold. However, this also depends on widespread adoption and utility.
What is an ICO and how is it related to Bitcoin?
An Initial Coin Offering (ICO) is a fundraising method where new projects sell their underlying crypto tokens in exchange for Bitcoin or other cryptocurrencies. It emerged from Bitcoin’s token concepts, offering an alternative to traditional venture capital financing for blockchain projects.