The significance of Bitcoin at $100,000
Many people find it hard to imagine Bitcoin rising to $100,000 each, even questioning: 'Why can a decentralized currency with no actual use value reach this price?' In fact, many people's understanding of Bitcoin only scratches the surface. Today, I will discuss the deep logic behind Bitcoin's price from another perspective.
Common Misunderstanding: Decentralization and Replacing the Dollar
1. The Basic Logic of Decentralization
When many people talk about Bitcoin, they often mention its decentralization and distributed ledger technology. This is certainly a major innovation of Bitcoin, but merely stopping at these characteristics is the shallowest understanding of its value. These technologies alone are not enough to drive Bitcoin to $100,000.
2. The Fantasy of Replacing the Dollar
Some people believe that Bitcoin's value lies in replacing the dollar and becoming the global currency. The reason is that Bitcoin is limited in supply and will not be issued recklessly like the dollar. This claim seems reasonable on the surface, but in reality, it overlooks one point: Bitcoin and the dollar are not opposing forces; rather, there may be a kind of 'collusive relationship' between them.
Deep Logic: Bitcoin as the 'reservoir' of the dollar
We need to take a look at the current state of U.S. debt: $35 trillion in national debt, a figure that is almost impossible to repay. So, how does the U.S. maintain its financial system? Let’s review the history of 'dollar pegging':
1. Gold Pegging (Bretton Woods System)
After World War II, the dollar was pegged to gold, establishing its global currency status through the Bretton Woods system. However, as global demand expanded, the U.S. gold reserves became strained, and this system collapsed in the 1970s.
2. Oil Pegging (Petrodollar System)
After the collapse of the Bretton Woods system, the U.S. reinforced the global status of the dollar through dollar settlements in oil trade. However, with changes in energy structure and geopolitical instability, the petrodollar system is also facing challenges today.
3. Bitcoin Pegging: The Answer in the Digital Age
Against the backdrop of the gradual failure of the petrodollar system, Bitcoin, as a scarce digital asset, provides a new anchor for the dollar. Its scarcity, decentralized characteristics, and global consensus make it a 'reservoir' for the dollar's excessive issuance and debt. By absorbing the excess dollars, Bitcoin is paving the way for the digitization of the dollar.
Institutional Actions: Reflection of Global Strategy
In recent years, major U.S. financial institutions such as BlackRock, Grayscale, and MicroStrategy have been hoarding Bitcoin on a large scale. These institutions are clearly not attracted by Bitcoin's technical charm, but rather see its potential strategic position in the global financial system.
When Wall Street analysts boldly predict that Bitcoin will reach $1 million each, ordinary people find it unbelievable. But in reality, what lies behind this is the logic of Bitcoin's role as a 'digital strategic reserve asset' for the dollar. It is not just an investment target, but carries the mission of the dollar's continued expansion.
The role of Bitcoin: supporting $35 trillion in U.S. debt
Currently, the U.S.'s high debt and the continuous over-issuance of the dollar require an asset that can absorb risks, and Bitcoin is playing this role. Just as China's real estate carries the value storage function of the RMB, Bitcoin may become a reserve asset for the digital dollar and a core tool in the global financial system in the future.
When you understand this strategic function of Bitcoin, a price of $100,000 each, or even $1 million each, no longer seems exaggerated. It is no longer just a 'decentralized currency', but an indispensable part of the global financial system.
