On May 18, 2010, a user with the ID Laszlo posted a bounty on the Bitcoin forum, offering 10,000 Bitcoins (worth a total of $30) in exchange for two large pizzas. Four days later, on May 22, Laszlo replied on the forum that he had successfully bought the pizzas.
At that time, he probably did not realize that what he had eaten was actually the "most expensive" pizza in history, worth about $1 billion. On December 4, U.S. President-elect Trump nominated conservative lawyer and cryptocurrency 'advocate' Paul Atkins as chairman of the U.S. Securities and Exchange Commission (SEC), prompting Bitcoin to break through the $100,000 mark.
The legendary figure who bought pizzas with 10,000 Bitcoins is Laszlo Hanyecz, a programmer from Florida, USA. He was among the earliest to engage with Bitcoin, starting to mine soon after its emergence and designing software to mine Bitcoin using graphics cards. Mining Bitcoin was not difficult in its early days, and Laszlo quickly accumulated tens of thousands of Bitcoins.
No one can predict the future, and for the 'expensive pizza' he consumed, Laszlo does not overly regret it. He stated that he was quite happy during that time, as he could enjoy free pizza using his graphics card. After eating the pizza, Laszlo frequently used Bitcoin for payments, spending about 100,000 Bitcoins in total, now worth as high as $10 billion.
This legendary story is a microcosm of Bitcoin's rise. In 2010, Bitcoin's price was only $0.003, and now it has reached $100,000, increasing over 30 million times in 14 years. After such an astonishing increase, where will Bitcoin go next?
Milestone moment
From being obscure to becoming widely known, Bitcoin's price reaching $100,000 marks a step closer to becoming a mainstream asset.
Senior researcher Zhao Wei from OKX Research Institute analyzed for the 21st Century Business Herald that Bitcoin's price has first broken the $100,000 barrier, refreshing its historical high. This breakthrough has not only attracted high attention from the global market but is also widely regarded as an important milestone in the development of the cryptocurrency industry, further solidifying Bitcoin's position in the financial market.
Two significant pieces of news on December 4 were crucial drivers of this breakthrough. First, Trump's nomination of Atkins as SEC chairman sparked market discussions. Atkins is known for his relatively relaxed regulatory stance and support for innovative technologies, and his appointment may bring a more favorable policy environment for the U.S. cryptocurrency industry, injecting positive expectations into the market. At the same time, Russian President Putin also publicly supported cryptocurrencies and proposed the possibility of using cryptocurrencies as alternative reserve assets.
Regarding Bitcoin's soaring price, Wang Peng, a deputy researcher at the Beijing Academy of Social Sciences, told the 21st Century Business Herald that Bitcoin reaching $100,000 is undoubtedly a historically significant event, marking not only a tremendous value growth since its inception but also reflecting the booming development of the global cryptocurrency market and the increasing acceptance of Bitcoin by investors. Achieving this milestone will further enhance investor confidence in Bitcoin and may attract more funds into the cryptocurrency market.
In the view of Liu Bin, director of the financial research office at the Shanghai Free Trade Zone Research Institute (Pudong Reform and Development Research Institute), Bitcoin's price reaching $100,000 should be an important milestone in the development of cryptocurrency, perhaps indicating that cryptocurrencies represented by Bitcoin are moving into a new stage of development.
Liu Bin explained to reporters the following reasons:
First, the regulation of the cryptocurrency sector is becoming increasingly refined, especially as the U.S. has gradually formed international standards in cryptocurrency regulation over the past few years, enhancing its influence on the sector.
Secondly, from an international perspective, international organizations such as the Bank for International Settlements and the Financial Stability Board have done a lot of work on the development of cryptocurrencies and cross-border regulation, forming a certain consensus for financial stability and financial risk prevention.
Thirdly, developed countries have established relatively complete ecosystems around cryptocurrencies in recent years, and mainstream financial institutions have developed financial infrastructure that meets regulatory requirements, achieving a compliant organic integration of traditional financial systems and the cryptocurrency sector, creating conditions for the development of cryptocurrencies.
Fourthly, the Bank for International Settlements proposed a financial internet based on blockchain as the underlying technology, aiming to achieve the unification of traditional financial assets at the foundational financial infrastructure level through tokenization, which has already gained recognition from relevant countries, which is also a positive development for cryptocurrencies.
Finally, Trump's relatively friendly attitude toward cryptocurrency development after his election, along with the potential for further supportive policies, acts as a catalyst.
The approval of Bitcoin spot ETFs this year already signifies that Bitcoin is no longer a 'niche asset'. In Wang Peng's view, the approval of Bitcoin spot ETFs is a milestone in the development of the cryptocurrency market, marking a new level of acceptance of Bitcoin by institutions. The launch of ETFs provides investors with more diversified investment choices, lowers investment thresholds and risks, and helps attract more funds into the cryptocurrency market.
With the digital transformation of the global economy and the continuous advancement of cryptocurrency technology, more and more investors are beginning to recognize the value of Bitcoin as a decentralized and scarce digital asset. Additionally, public support from significant figures, such as Trump's support for cryptocurrency, has contributed to the rise in Bitcoin prices. These factors have collectively driven the surge in Bitcoin prices.
Can the 'Trump Trade' continue?
So far this year, Bitcoin's price has risen by over 100%. Since Trump won the election, Bitcoin has risen by over 40%. The 'Trump Trade' has become an important driving force for Bitcoin recently, with a series of news acting as catalysts for the price surge.
Driven by the 'Trump Trade', the cryptocurrency market's spot trading volume reached $2.7 trillion in November, setting a new high since May 2021, more than double the trading volume in October ($1.14 trillion). The total trading volume of Bitcoin futures on trading platforms in November reached $2.59 trillion, while Ethereum futures reached $1.28 trillion, also reaching new highs since May 2021.
As Trump's inauguration approaches, on November 21, SEC Chairman Gary Gensler announced that he plans to resign on January 20, 2025, when Trump is sworn in. Gensler is a well-known skeptic of cryptocurrencies, and during his tenure, he has targeted the crypto industry, suing companies like Coinbase, Kraken, and Binance for failing to register with the U.S. SEC, violating regulations.
On December 4, Trump's nomination of Atkins as SEC chairman brought the cryptocurrency market back into a frenzy. Atkins had questioned the SEC's crackdown on cryptocurrency companies and might take a friendlier stance toward the cryptocurrency market. Besides Trump, many other Republicans also hope that the SEC will adopt a more favorable attitude toward the cryptocurrency market compared to the Biden administration.
Additionally, recently Trump's team has been discussing with the digital asset industry whether to establish a new position in the White House specifically responsible for cryptocurrency policy, which would be the first position in history to focus on the crypto industry.
According to Livio Weng, COO of HashKey Group and CEO of HashKey Exchange, Trump's support may also influence more older traditional financial decision-makers, many of whom have held conservative or even skeptical views on Bitcoin. However, Trump's recognition may prompt them to reevaluate the potential of crypto assets and increase the acceptance of cryptocurrencies in mainstream finance.
Wang Peng analyzed that a series of Trump's policies, including support for cryptocurrencies and plans to establish a White House position specifically responsible for digital asset policy, have indeed catalyzed Bitcoin's price surge. These policy signals indicate that the U.S. government's attitude toward cryptocurrencies is becoming more favorable, providing a favorable policy environment for the development of cryptocurrencies like Bitcoin.
Next, can the 'Trump Trade' continue? Liu Bin stated that the 'Trump Trade' may last for some time. For any asset to gain public recognition and enter the public eye, it needs historical testing and further realization of its own value. Bitcoin is currently in a rising cycle, but there will definitely be fluctuations along the way, requiring close observation of whether Trump's policies align with market expectations. More importantly, for Bitcoin to truly become an investable asset and achieve the status of digital gold, it will need to undergo periodic tests and gain recognition from the market and institutions.
In Wang Peng's view, how long the 'Trump Trade' can continue depends on multiple factors, including the implementation of subsequent policies by the Trump administration, the overall development trend of the cryptocurrency market, and changes in the global economic environment. If the Trump administration can continue to introduce favorable policies for cryptocurrency development and effectively implement them, then the 'Trump Trade' may last for a considerable time. However, any policy effect is limited and influenced by various uncertainties, so the duration remains uncertain.
Although Bitcoin's price is currently high, there are still risks of a pullback. The cryptocurrency market is highly volatile, and prices are easily influenced by market sentiment, policy changes, and other factors. Therefore, investors should maintain a cautious attitude and manage risks when participating in cryptocurrency trading such as Bitcoin.
Zhao Wei reminds that the high volatility of the Bitcoin market remains a characteristic that cannot be ignored. In the short term, prices may face fluctuation risks due to profit-taking pressures and uncertainties from policy changes. Meanwhile, the global economic environment continues to evolve, bringing certain uncertainties to the market. However, from a long-term perspective, Bitcoin's investment value and actual application scenarios are gradually expanding, including its potential as a store of value and a means of cross-border payment. With the continuous inflow of institutional funds and ongoing technological developments, its position as an important component of global asset allocation may further solidify.
"Double-Sided" Bitcoin
Behind Bitcoin's surge, the attitudes of various investors vary widely. After the approval of Bitcoin spot ETFs, some institutions' acceptance of Bitcoin has risen to a new level, but value investors like Warren Buffett still scoff at it.
Regarding Bitcoin's rise of over 30 million times in the past decade, Wang Peng believes there are elements of both bubbles and fundamental support. On one hand, as an emerging digital asset, Bitcoin's price is easily influenced by market sentiment and speculative behavior, leading to bubbles. On the other hand, Bitcoin also possesses some fundamental advantages, such as decentralization and strong scarcity, which allow it to function to some extent as a store of value and a means of payment.
Behind the controversies surrounding Bitcoin, Wang Peng believes there are several main reasons: first, Bitcoin, as an emerging digital asset, has uncertainty regarding its value and future development prospects; secondly, the Bitcoin market is highly volatile, with prices easily influenced by various factors; and thirdly, different investors have varying views and investment strategies regarding Bitcoin. These factors collectively lead to the ongoing controversies surrounding Bitcoin in the market.
In Liu Bin's view, the controversy surrounding Bitcoin is a normal phenomenon, just like investing in the stock market where each stock has different perceived values among different investors, reflecting varying levels of understanding. Currently, Bitcoin has undergone a long development process, from being relatively unknown to now reaching a price of $100,000, indicating a gradual recognition of Bitcoin's value in the market, which has also gained the acknowledgment of the majority in the market, suggesting that the market is preparing to accept Bitcoin as an investable asset, which may also be a trend.
Despite the ongoing controversies, the overall acceptance of Bitcoin in the market is gradually increasing. On November 21, the asset management scale of the American ETF directly investing in Bitcoin first broke through $100 billion, with a total of about $104 billion managed by 12 U.S. Bitcoin ETFs, including products from BlackRock and Fidelity. In comparison, as of November 21, the asset management scale of U.S. gold ETFs was about $120 billion. The two figures are now quite close.
Will Bitcoin be able to stand alongside gold in the future? Liu Bin believes that, from the current perspective, Bitcoin has a certain possibility of becoming digital gold, an important asset that stands alongside gold. If Trump really establishes a national Bitcoin reserve and introduces further supportive policies, combined with relatively favorable monetary policy and external conditions, it may further accelerate Bitcoin's assetization, and its status as digital gold will be further strengthened.
In Wang Peng's view, Bitcoin and gold share certain similarities, such as scarcity and the function of storing value. With the digital transformation of the global economy and the continuous development of the cryptocurrency market, Bitcoin is expected to become a comparable store of value to gold in the future, though this still needs time for verification and market validation. At the same time, Bitcoin, as an emerging digital asset, differs significantly from gold in terms of properties, uses, and market performance.
In the long term, the future direction of Bitcoin depends on the combined effects of various factors and carries uncertainty. On the one hand, Bitcoin, as a decentralized and scarce digital asset, may continue to attract investors' attention and enthusiasm. On the other hand, Bitcoin also faces many challenges and risks, such as regulatory uncertainties and high market volatility.
Embrace the technological revolution
Although there are still some controversies surrounding Bitcoin and policies vary across countries, there is a general embrace of the underlying technology.
In 2022, U.S. lawmakers clearly stated the importance of ensuring the Web3 revolution occurs in the U.S. In Livio's view, the prolonged failure of Bitcoin ETFs to pass, followed by the recent approvals of Bitcoin and Ethereum ETFs, signals a deeper realization in the U.S. of the significant importance of leading Web3 development.
Livio noted that besides the U.S., other major economies and emerging markets around the globe are also accelerating their layouts for Web3, including the EU, the UK, Japan, Singapore, and Dubai, all actively positioning themselves in Web3 to gain an advantage in global competition.
Recently, the EU has passed the Regulation on Markets in Crypto-Assets (MiCA), achieving a more systematic layout. Since the UK government released its 'Digital Assets Strategy' in 2022, the UK Treasury and the Financial Conduct Authority have introduced a series of supportive policies to create conditions for digital asset innovation while ensuring consumer protection. The Japanese Financial Services Agency has become more lenient in its regulation of cryptocurrencies in recent years and encourages local financial institutions to explore more in blockchain and Web3 technology. The Monetary Authority of Singapore has pushed a series of supportive policies, including tax incentives, innovation labs, and funding support, hoping to create a friendly business environment to position Singapore as Asia's Web3 and FinTech hub. Dubai is also actively building its competitive advantage in the Web3 field.
It is important to note that Hong Kong is playing a crucial role in this competition due to its geographical location, economic environment, and policy support. Livio stated that as a financial center in Asia and a bridge connecting the East and West, Hong Kong's development in the Web3 space not only influences regional economic transformation but also plays a vital role in shaping the global Web3 ecosystem.
In the past, the rules of the global crypto market were mainly set by a few large economies, leading to the phenomenon of 'regulatory arbitrage.' Now, as more countries and regions gradually improve their compliance policies, this phenomenon is gradually disappearing. Looking ahead, Livio predicts that licensed operations, regulatory compliance, and safeguarding customer assets will become mainstream in the crypto industry.
Overall, Livio believes that Web3 is not only a technology-driven financial revolution but also a global paradigm shift. The development of Web3 has become a global consensus, with various regions actively participating in the competition in this emerging field through policies and regulatory measures to promote technological innovation and drive economic growth.