$BTC Today, let's sort out Bitcoin—this digital currency born in the shadow of the 2008 financial crisis, which has transformed from a marginal experiment into a mainstream financial asset over the past 16 years.
1. The Bitcoin that challenges banks
In October 2008, a mysterious programmer using the pseudonym Satoshi Nakamoto released the white paper for 'Bitcoin: A Peer-to-Peer Electronic Cash System.' This nine-page document laid the foundation for a decentralized digital currency system. Amid the collapse of Lehman Brothers and turmoil in the global financial system, this alternative financial system concept resonated with the cypherpunk community.
In January 2009, Satoshi Nakamoto mined the genesis block (block number 0) on the Bitcoin network, embedding a headline from The Times that read, 'Chancellor on brink of second bailout for banks.' This symbolic message showcased his disdain for the banking system and resonated with many tech enthusiasts.
After that, Bitcoin became a software toy in the geek community, where everyone gifted each other Bitcoin tips, but no one acknowledged it had any value. Until the arrival of 'Bitcoin Pizza Day'.
On May 22, 2010, programmer Laszlo Hanyecz used 10,000 Bitcoins to purchase two Papa John's pizzas, completing the first real-world transaction with Bitcoin. This transaction officially bridged Bitcoin with the real world and would become the most expensive transaction in Bitcoin history, worth $1 billion today.
After that, like many early internet technologies, the earliest adopters of Bitcoin were various underground market transactions.
In 2013, the FBI shut down the dark web market 'Silk Road' and seized 174,000 Bitcoins, marking the entry of this digital currency into regulatory sight. Accompanied by the ICO hype in 2017, Bitcoin futures, and the establishment and demise of several Bitcoin funds, the asset that JPMorgan CEO Jamie Dimon once called a 'Ponzi scheme' ultimately became an investment target that Wall Street giants could not ignore.
2. Bitcoin becomes the shadow of banks
In January 2024, Wall Street giants like BlackRock launched Bitcoin ETFs, laying the foundation for this bull market. Ironically, this digital currency, originally designed to evade government intervention, has now reached new heights due to political backing.
Bitcoin's price surged from $70,000 on the day of the U.S. elections to $100,000, backed by a series of campaign promises from Trump. Trump not only promised to establish a federal Bitcoin reserve but also recently appointed a new SEC chairman, Paul Atkins, who is pro-cryptocurrency. Many American investors are eager to dive in. As mainstream acceptance of Bitcoin grows in the U.S., we see Bitcoin becoming part of the banking financial system it seeks to challenge.
Bitcoin has not become a bank; it has turned into a kind of 'shadow bank.' Like all existing private financial and material exchange systems, when it cannot be completely shut down, it becomes part of the system's operation. More importantly, all transaction records of Bitcoin are automatically and publicly recorded on the network, making it easy to track despite lack of regulation. Once one knows to whom an account belongs, all historical transactions become clear and transparent. U.S. regulatory agencies have established a series of registration systems that, while not fully enforced, have made this system increasingly transparent to some extent.
3. Can the wealth creation myth of Bitcoin continue?
As Bitcoin climbed over $100,000, new wealth creation myths emerged. The well-known Bitcoin fund Pantera achieved an astonishing 1000x return over 10 years, becoming a hot topic overseas. This is also why many people are paying attention to Bitcoin. We must remind everyone not to just look at Bitcoin's rise but also at its volatility; in this completely emotionally driven market, there are daily liquidations of accounts worth millions.
Analyzing the number of liquidations in bullish and bearish markets, it can be observed that the higher the position, the more liquidations occur. This is why we have always advised everyone not to play with contracts and to avoid leverage. An emotionally driven market is only suitable for long-term holding.
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