The three treasures of the cryptocurrency world: the cornerstone of investment.
In the cryptocurrency realm filled with opportunities and risks, three types of assets serve as solid cornerstones, building a stable path for investors. These are the 'three treasures of cryptocurrency' — Bitcoin, stablecoins, and platform tokens. This is not a hype concept deliberately created by a KOL or VC but a valuable consensus summarized by countless individuals amid the market's ups and downs. Reasonably allocating them is far more important than chasing temporary trends. Just like the classic combination of 'cash + fixed income + equity' in traditional finance, these 'three treasures' form the core assets that can truly preserve value in the hands of investors.
Bitcoin, as the core and market card of the cryptocurrency world, stands firm as the stabilizing force of the cryptocurrency sphere, always guarding the stronghold of value storage. In recent years, Bitcoin's price has strongly broken through 120,000 USD, with a market capitalization exceeding 2.4 trillion USD, ranking among the top five in global asset market capitalization. Increasingly more national funds, Wall Street institutions, and publicly listed companies have incorporated BTC into their long-term investment portfolios, and it has long since bid farewell to its past image as merely a 'speculative coin,' transforming into a value storage asset recognized by mainstream capital. For newcomers stepping into the cryptocurrency world, Bitcoin is the best starting point to open the door to cryptocurrency investment. It not only defines the valuation logic of the cryptocurrency world but also practically dominates the cyclical fluctuations of the market. Its long-term value is reflected not only in its remarkable price increase but also in its ability to traverse bull and bear cycles, withstand market sentiment fluctuations, and connect traditional finance with the crypto world.
Stablecoins serve as a safe harbor for investors navigating the cryptocurrency market, an indispensable transit station for capital flow. They do not pursue significant price fluctuations or require excessive speculation, yet in every market fluctuation, they provide the essential support for investors to 'enter and exit.' Whether it is daily trading operations, hedging needs in response to market risks, fund transfers, cashing out, or participating in DeFi, CeFi projects, and new offerings, mainstream stablecoins like USDT, USDC, and FDUSD are the liquidity gateways for these operations. When investors successfully sell high-volatility assets and wish to secure their profits, the funds will often first return to stablecoins, waiting for the next suitable investment opportunity. By mid-2025, the global market capitalization of stablecoins has approached 150 billion USD, with USDT alone exceeding 110 billion USD, with its trading volume repeatedly surpassing BTC, making it the 'circulatory system' of the cryptocurrency world, maintaining the liquidity of the entire cryptocurrency ecosystem.
Platform tokens serve as tickets for investors to ride the fast train of exchange development and are also the golden shovel and equity certificates in the exchange ecosystem. They are closely tied to the business and ecological development of the exchange, with clear and distinct sources of value: as the platform continues to grow, users can benefit from it. Whenever investors trade, stake assets, or participate in new projects on the exchange, they are almost always involved in the application scenarios of platform tokens. Common applications include fee discounts, obtaining participation qualifications for Launchpad/Launchpool, improving VIP levels for more privileges, earning staking rewards, and enjoying gas discounts on-chain. In some public chain ecosystems, platform tokens can also circulate as main tokens. For holders, the core charm of platform tokens lies in the fact that their value is not solely dependent on speculation, but is continuously demonstrated through practical usage. The larger the platform, the more users, and the more active the business, the higher the token burn frequency, and the richer the application scenarios. This represents a truly deeply binding investment logic with the growth of the platform.
Bitcoin: The Anchor of the Cryptocurrency World
In this rapidly changing world of cryptocurrency, Bitcoin is like a towering mountain, always occupying a core position and serving as a stabilizing force. From being questioned since its inception to now being highly recognized by mainstream capital, Bitcoin has gone through a legendary journey.
In the early days of Bitcoin, it was like a solitary walker exploring in the dark, facing numerous doubts and challenges. Its decentralized nature broke the inherent model of the traditional financial system, leaving people with uncertainty about its future. However, Bitcoin gradually attracted a group of pioneering investors with its unique charm. They saw the immense potential Bitcoin holds in the digital world and firmly believed that this emerging digital currency would change the future financial landscape.
With the passage of time, the value of Bitcoin has gradually been recognized by the market. Increasingly more investors are beginning to pay attention to and participate in Bitcoin trading, and its market influence continues to expand. Especially in recent years, Bitcoin's price has strongly broken through 120,000 USD, with a market capitalization exceeding 2.4 trillion USD, successfully ranking among the top five in global asset market capitalization, a remarkable achievement that has drawn global attention. Today, Bitcoin is no longer the 'speculative coin' that was once underestimated; it has transformed into a value storage asset recognized by mainstream capital. National funds, Wall Street institutions, and publicly traded companies have all incorporated BTC into their long-term investment portfolios, which undoubtedly represents a high affirmation of Bitcoin's value.
The reason Bitcoin holds such an important position in the cryptocurrency world is inextricably linked to its unique characteristics. Its decentralized design eliminates the need for traditional financial intermediaries in transactions, reducing transaction costs and improving transaction efficiency while also enhancing the security and privacy of transactions. The fixed total supply of 21 million coins endows it with scarcity, similar to gold, which is why Bitcoin is often referred to as 'digital gold.' This scarcity gives Bitcoin a strong value preservation ability in the face of inflation and other economic risks, making it an important choice in investors' asset allocation.
From the price trend, Bitcoin has experienced several ups and downs in recent years but generally shows an upward trend. In the bear market of 2022, the price of BTC once dropped to 16,000 USD; however, it was not overshadowed by the bear market gloom. As the market gradually warmed, Bitcoin broke through 44,000 USD in 2023, and the upward momentum was even stronger in 2024, exceeding 106,000 USD. Now, Bitcoin has firmly stood at 122,000 USD, with an approximate increase of 300% over the past three years. These data not only showcase the significant volatility of Bitcoin's price but also highlight its potential in long-term investment.
In terms of market influence, Bitcoin acts as the 'weather vane' of the cryptocurrency world; its price fluctuations often trigger movements across the entire cryptocurrency market. When Bitcoin's price rises, it typically leads to an increase in the prices of other cryptocurrencies, attracting more investors into the cryptocurrency space; conversely, when Bitcoin's price falls, the entire cryptocurrency market tends to shake accordingly. Additionally, Bitcoin's development has also promoted the popularization and application of blockchain technology, laying a solid foundation for the development of the entire cryptocurrency industry.
For newcomers entering the cryptocurrency realm, Bitcoin is the best starting point to open the door to cryptocurrency investment. It not only defines the valuation logic of the cryptocurrency world but also dominates the cyclical fluctuations of the market at a practical level. When investing in Bitcoin, investors should maintain rationality and calmness, fully understand its risks and characteristics, and formulate a reasonable investment strategy based on their investment goals and risk tolerance.
Stablecoins: A Safe Harbor for Funds.
In the investment landscape of cryptocurrency, stablecoins play an indispensable and important role, acting as a safe haven for investors' funds and the core hub of liquidity. They stand in stark contrast to Bitcoin's high volatility, offering a reliable medium for value storage and transactions for cryptocurrency investors.
The core charm of stablecoins lies in their relatively stable price, usually pegged to fiat currencies (like the dollar) or other stable assets, aiming to overcome the drawbacks of traditional cryptocurrencies' price volatility. This feature makes stablecoins a key tool that investors cannot bypass in trading, hedging, transferring funds, and cashing out within the cryptocurrency market. Whether participating in DeFi (decentralized finance) projects, using smart contracts for lending, liquidity mining, or conducting regular trading and wealth management on CeFi (centralized finance) platforms, stablecoins serve as the foundational asset supporting these complex financial operations.
During periods of severe market volatility, the hedging function of stablecoins is particularly prominent. When the prices of cryptocurrencies like Bitcoin plummet significantly, investors can quickly convert their held crypto assets into stablecoins, effectively locking in profits and avoiding substantial asset depreciation. This rapid transfer of funds and hedging operation makes stablecoins a safe haven for investors amid the storms of the cryptocurrency market.
Data shows that stablecoins have performed remarkably well in terms of market capitalization and trading volume. By mid-2025, the global market capitalization of stablecoins has approached 150 billion USD, with USDT being the largest and most widely used stablecoin, exceeding 110 billion USD in market capitalization. Its trading volume is astonishing, repeatedly surpassing Bitcoin, making it the 'main force' in cryptocurrency trading. Such a massive market capitalization and high-frequency trading volume fully highlight the important position of stablecoins in the cryptocurrency market; they act as the 'circulatory system' of the cryptocurrency ecosystem, maintaining the liquidity and activity of the entire market.
Stablecoins are not only important tools for daily trading for investors but also serve as a 'reservoir' and 'transit station' for funds in the cryptocurrency market. When investors sell high-volatility crypto assets and wish to secure their profits, funds often first return to stablecoins, waiting for the next suitable investment opportunity. This temporary storage and circulation function of funds gives stablecoins a crucial role in the capital cycle of the cryptocurrency market, providing investors with flexible capital allocation space.
In this uncertain market of cryptocurrency, stablecoins, with their stability, high liquidity, and wide range of application scenarios, have become an indispensable asset allocation choice for investors. They not only provide safety for investors' funds but also provide a solid foundation for various financial activities in the cryptocurrency market, making them an essential component of the cryptocurrency ecosystem.
Platform Tokens: Growing Together with the Platform.
Platform tokens, as a core component of the cryptocurrency exchange ecosystem, have a close and inseparable relationship with exchanges, resembling a symbiotic entity that is interdependent and develops together. They are not just digital assets but also an important bridge connecting exchanges with users, carrying rich application scenarios and unique sources of value.
Essentially, platform tokens are native tokens issued by cryptocurrency exchanges, and their value is closely tied to the development status of the exchanges. Factors such as the number of users, trading volume, market share, and innovation capability of the exchange will directly influence the price trend and market performance of platform tokens. For example, when an exchange continuously attracts new users and its trading volume keeps growing, the demand for its platform tokens will correspondingly increase, thus pushing their prices up; conversely, if an exchange faces negative events or market competition pressure, the value of its platform tokens may also be impacted.
The application scenarios of platform tokens are extremely broad, covering transaction fee discounts, participation in Launchpad/Launchpool projects, staking rewards, VIP level upgrades, and even circulation as main tokens in some public chain ecosystems. Taking BNB from Binance as an example, users holding BNB can enjoy a certain percentage of fee discounts when trading on the Binance exchange, significantly lowering trading costs and enhancing trading efficiency. Additionally, BNB can be used to participate in early subscriptions for high-quality projects on Binance's Launchpad, providing users with opportunities to access potentially high-return projects. In terms of staking rewards, users can earn corresponding interest income by staking BNB, further increasing their motivation to hold BNB.
Besides BNB, Bitget's BGB and OKX's OKB also have their unique characteristics. BGB on the Bitget platform can not only be used for fee discounts but is also closely integrated with the platform's copy trading service. BGB holders can profit by copying the trading strategies of successful traders, providing users with a new investment experience. Meanwhile, Bitget regularly repurchases and destroys BGB, reducing its market circulation and enhancing its scarcity. OKB plays an important role in OKX's diversified business; besides common fee discounts and participation in Jumpstart projects, it also serves as a medium for payments, collateral, and rewards in areas such as NFT, DeFi, and payments. OKX maintains the scarcity and value of OKB by regularly repurchasing and destroying it.
Different platforms' token burn mechanisms also vary, which affects the value of platform tokens to some extent. BNB employs a dual-track model combining BEP-95 automatic burn with manual quarterly burns, with a clear rhythm and stable mechanism. Its latest quarterly burn amount reached 916 million USD, demonstrating strong deflationary execution; however, due to its massive market capitalization, the single-round burn ratio has long been maintained at around 1%, resulting in relatively low marginal price pressure. BGB, on the other hand, exhibits a structure characterized by 'low market capitalization and high deflationary pressure.' By the end of 2024, Bitget officially burned 800 million BGB originally belonging to the team, compressing the total supply from 2 billion to 1.2 billion, announcing a current 100% fully circulating state with no subsequent unlocking shocks or distribution risks. The first quarterly burn in Q1 2025 reached 2.5% of the volume; although the burn amount is smaller than BNB's, it approaches three times the latter's market capitalization, creating a stronger supply reduction effect and significantly impacting prices. Currently, OKB does have a deflationary mechanism outlined in its white paper, but the actual burn rhythm is opaque, amounts are not disclosed, and the paths are unverifiable, making it difficult for users to establish stable expectations, resulting in moderate support for prices and market feedback.
When investing in platform tokens, investors need to consider multiple factors comprehensively. They should thoroughly understand the fundamentals of the exchange, including its market position, user base, trading volume, innovation capability, and compliance status. An exchange with strong capabilities and good development prospects often provides solid value support for its platform tokens. They should pay attention to the application scenarios and actual usage of platform tokens. The richer the application scenarios and the higher the user frequency, the more likely the value of platform tokens will increase. Investors should also monitor the deflationary mechanisms, total supply structure, and market performance of platform tokens. A deflationary mechanism can reduce the circulation of platform tokens, increasing their scarcity; a clear total supply structure allows investors to better evaluate their value potential; and market performance reflects the degree of market recognition for platform tokens.
ENA Emerges: The Potential Star of ETH?
Among the many projects in the Ethereum ecosystem, Ethena stands out as a rising star, with its native token ENA recently attracting particular attention, rising nearly 50% in a week and becoming a market focal point. This surge is not coincidental but is driven by a confluence of multiple factors.
Ethena is a star project within the Ethereum ecosystem that has attracted much attention. Its business layout closely revolves around Ethereum, with most of its business focused on the Ethereum ecosystem. Although a small amount of USDe flows into other ecosystems through cross-chain activities, Ethereum remains its core battlefield, making it a true 'affiliated project of Ethereum.' As a yield-bearing stablecoin project focused on 'spot-futures arbitrage,' the stablecoin USDe issued by Ethena has a unique collateral model, constituted by equal amounts of long spot positions and short contract positions. The sources of revenue mainly include 'staking income from long spot positions' and 'funding rate income from short contracts.' This unique business model has secured a distinctive position for Ethena within the Ethereum ecosystem, laying the foundation for the price trend of ENA.
The recent surge of ENA is primarily due to the uplift from ETH. As an important public chain in the cryptocurrency field, projects within its ecosystem are often closely related to ETH's price movements. Ethena, as one of the key projects in the Ethereum ecosystem, has naturally benefited from ETH's rise. As ETH's price climbs, market confidence in Ethereum ecosystem projects strengthens, leading to continuous capital inflows, which also benefits ENA. However, ETH's rise is merely a prerequisite for ENA's increase and cannot fully explain why ENA has stood out among many Ethereum concept coins.
One of the core reasons for ENA's rise is its business model returning to a positive flywheel. Previously, due to the overall pessimistic market sentiment, the fee rates in the contract market remained low, severely impacting Ethena's protocol revenue capabilities, with sUSDe yields performing poorly for an extended period. However, the market has recently warmed up rapidly, especially with the rising ETH market, leading to a continuous increase in contract fee levels. Ethena's page shows that the current average annualized rate of the protocol is about 16%. The increase in fee market yields directly drives the growth of sUSDe yields, with the average yield of sUSDe rising from around 5.59% to 9.74% in the past two weeks. This significant increase in yield has attracted more capital inflows. On-chain data shows that the issuance scale of USDe has grown to around 6.1 billion USD, setting a new historical high. This influx of funds further drives the price of ENA upwards, forming a positive cycle: market warming → bullish sentiment rising → fee income growth → stablecoin yields increasing → more capital inflows → stablecoin issuance scale growing → protocol fundamentals improving → price receiving stronger support.
The passage of the stablecoin bill brings another significant advantage for ENA. At 12:00 AM on July 19, Beijing time, U.S. President Trump signed the GENIUS Act, a law focused on the development of the stablecoin industry, officially becoming effective legislation. Although the collateral structure of USDe might not meet the requirements of 'stablecoins must be fully backed by USD or other highly liquid assets at a ratio of 1:1' outlined in this act, Ethena has long been prepared. At the end of last year, Ethena launched a new stablecoin product, USDtb, supported by BlackRock BUIDL, which utilizes cash or cash-equivalent reserves to support at a 1:1 ratio. As of the time of writing, the issuance scale of USDtb has grown to 1.46 billion USD. Now, Ethena employs a dual-track development strategy, focusing USDe on the crypto-native market while targeting compliant institutional markets with USDtb. This layout makes it more competitive in the stablecoin market and provides strong support for the price of ENA.
Another potential factor for ENA's recent rise is the market's expectations for its 'fee switch.' In DeFi protocols, the 'fee switch' determines whether the protocol's income is distributed to the native tokens, directly impacting the value capture capability of the tokens. Ethena has clearly defined five conditions for activating the 'fee switch' in community voting. Currently, three of the five conditions have been met: the circulation of USDe exceeds 6 billion USD, currently at 6.1 billion USD; cumulative protocol income exceeds 250 million USD, currently at 431.31 million USD; and the reserve fund exceeds 1% of the USDe supply. Although two conditions remain unmet, considering the recent upward trend in fees, the yields of sUSDe are also rising in tandem, which will help achieve the fifth condition, and only one exchange needs to integrate for the third requirement to be met. The market generally anticipates that the activation of the 'fee switch' is not far off, prompting investors to place bets early, driving up the price of ENA.
Market Insight: The Subtle Relationship Between Rolex and the Cryptocurrency Bull Market.
In the ups and downs of the cryptocurrency market, there exists a seemingly unrelated yet closely connected indicator — the price trend of Rolex watches, which acts like a unique mirror, reflecting the rise and fall of the cryptocurrency bull market, serving as a subtle barometer of market sentiment.
Rolex watches, as a classic representative of luxury goods, possess the characteristics of Veblen goods, meaning that the higher the price, the greater the demand, with their value being more reflected in the symbolism of status and social standing rather than merely their timekeeping function. During prosperous times in the cryptocurrency market, those who have become wealthy from investing in cryptocurrencies often indulge in purchasing luxury items like Rolexes to showcase their wealth. This ostentatious consumption behavior is not coincidental but a significant indicator of a shift in market psychology.
From historical data, there is a subtle lagging relationship between Rolex and the cryptocurrency market. During the period from 2020 to 2024, by comparing the watch index with Bitcoin's price movements, it can be observed that when Bitcoin first reached its all-time high in 2021, the watch market did not immediately enter a boom period. It was only when NFT prices soared to house-like prices that the watch market became hot again. This indicates that Rolex trends are not the starting signal of the cryptocurrency bull market but rather a warning that the market is nearing its peak. After the cryptocurrency market collapsed, the prices of Rolex watches also could not escape, plummeting nearly 30% within a year. This was not due to a disappearance of market demand but rather because the core demand as a symbol of identity had nearly exhausted.
In traditional finance, people often rely on volatility indices (such as the VIX index) to measure market panic levels, while in the contract market, funding rates are used to judge market sentiment. However, the price trends of luxury goods like Rolex watches can reflect investor behavior and sentiment from another perspective. When investors see Rolex watches priced at twice their retail price or someone flaunting their custom Rolex NFT online, it is often a dangerous signal that the cryptocurrency bull market is nearing its peak. At this time, market sentiment is overly optimistic, and investors, intoxicated by wealth, begin to pursue these symbols of wealth.
So, what stage is the current market in? Now, Bitcoin and Ethereum and other cryptocurrencies are again close to historical highs, with older mainstream coins like ADA and XRP rising by 50% over the past month. However, the Rolex market appears calm, with prices stable, and some models even experiencing slow sales, with dealers not reporting shortages, and the premium phenomenon is not obvious. This indicates that although the cryptocurrency market shows an upward trend, the profits accumulated in this cycle have yet to be widely realized. The recent meme coin craze has indeed created some millionaires, but in the overall speculative cryptocurrency market, this is only a minority phenomenon.
However, astute investors will notice that the correlation between Rolex prices and cryptocurrency prices has reappeared. Discussions and posts about Rolex on crypto Twitter have gradually increased, although the enthusiasm is far from that of 2021. Looking back at 2021, the cryptocurrency market first rose, subsequently triggering the NFT boom, and only later did Rolex prices soar, with the watch market's response being notably delayed. This time, however, Bitcoin and watch prices began to rise almost simultaneously, with both tracking each other closely since March. However, a closer look at the price charts reveals that while Bitcoin is nearing historical highs, watch prices have not yet reached their peaks from 2022; overall watch market prices have declined. Brands like Cartier, Omega, and AP have seen their watch prices drop by 30-40% compared to retail prices.
This phenomenon highlights two key issues. The current market has not yet entered the excitement phase, and investor sentiment has not been fully ignited. Most watches, as investment items, do not perform well; their design intent is more about conveying value emotion rather than preserving or increasing value. The rise in watch prices does not mean the market has reached its peak, but it does indicate that the market has entered the mid-stage of a bull market. Generally, people are only willing to engage in symbolic consumption after overcoming difficult market periods, and as confidence in wealth accumulation gradually recovers. This also means that when the true moment of 'wealthy consumption' arrives, the market may already be close to its peak.
Blockchain Development and Reflection: Practical Action is Better than Empty Talk.
In the development process of the blockchain field, every change in Ethereum is like a stone thrown into a lake, creating ripples that draw widespread attention. Recently, Ethereum took an important step in increasing the gas limit, which has had a profound impact on its transaction throughput and provided new directions for the development of the entire blockchain industry.
According to The Block, nearly half of the validators staking Ethereum voted in favor of 'raising the gas limit,' and this positive support has propelled the process of increasing the gas limit for each block in Ethereum. This adjustment is significant, directly affecting Ethereum's transaction processing capacity. Previously, the 30 million gas limit somewhat restricted Ethereum's transaction efficiency, while the recent proposals to set the gas limit at over 39 million units, an 8% increase from the previous 36 million, represent another major breakthrough since the gas limit was raised from 30 million three years ago.
With the increase in the gas limit, the transaction throughput of the Ethereum Layer 1 blockchain has significantly improved. This means that the Ethereum network can handle more transactions in the same amount of time, greatly alleviating the issue of transaction congestion and enhancing user experience. For example, during previous high-load trading periods, users might have to wait a long time to complete a transaction, but now, due to the increase in throughput, transaction confirmation times have been significantly shortened, allowing users to complete various operations more quickly.
Ethereum co-founder Vitalik Buterin also mentioned this initiative in an X post, pointing out that nearly 50% of the staked shares voted in favor of raising the Layer 1 gas limit to 45 million. This not only reflects the strong demand and positive attitude within the industry towards Ethereum's scaling, but also shows Vitalik's attention and recognition of this initiative. He also specifically praised Geth's recent version update, which reduced the storage capacity of archived nodes by about 90%, believing that this improvement made the increase in gas limits safer and more feasible. This indicates that the development of Ethereum is a systematic project that requires not only adjustments to core parameters but also continuous optimization and innovation at the technical level to ensure the stable operation of the entire network.
However, against the backdrop of the blockchain industry's development, Comrade Meng Yan's article has sparked extensive discussion. In the article, he lamented the passage of the GENIUS Act in the U.S., likening it to the Bretton Woods Conference and the Nixon Shock in modern monetary history, asserting that the 'supra-sovereign network' of dollar stablecoins has already integrated the world into its system, and other countries are facing the beginning of a monetary sovereignty defense battle. Although the article is eloquent, grand in tone, and broad in vision, upon calm reflection, we can find some viewpoints worth debating.
From the perspective of the Chinese government's strategic investment in blockchain, Comrade Meng Yan's views seem somewhat one-sided. Since China proposed 'blockchain as a core technology and an important breakthrough for independent innovation' in 2019, the government's layout and promotion in the blockchain field has never stopped. The central bank is actively promoting the implementation of DC/EP, clearly establishing the importance of blockchain at the institutional level and providing solid policy support for the development of blockchain technology. Distributed ledger platforms with state-owned backgrounds have sprung up, and consortium chains and industrial chain projects are flourishing. Although not every project can achieve success during the development process, this does not overshadow the significant efforts and remarkable achievements made by the state in the blockchain field.
For Chinese internet entrepreneurs exploring the Web3 direction, Comrade Meng Yan's evaluation seems somewhat biased. Chinese internet companies have never ceased their attempts in the Web3 field, whether it be NFT projects, building public chains, creating wallets, or exploring the metaverse, showcasing a positive spirit of innovation. Despite facing the dual challenges of compliance restrictions and vague overseas policies, leading to a difficult path from experimentation to landing, and from products to applications, the efforts and persistence of entrepreneurs are undeniable. We should view their explorations and attempts objectively, encouraging them to innovate continuously in adversity rather than simply blaming and criticizing.
The development of the blockchain industry has never been driven by one or two emotionally charged articles; it requires countless diligent practitioners who are grounded in technology research and development, infrastructure construction, and application scenario expansion, making concrete actions to contribute to the industry's growth. At the current stage of development, the industry needs to 'talk less about ideologies and solve more problems,' effectively addressing the complex game between technology and regulation, innovation and order, and exploring a prudent, practical, and reliable development path for the blockchain revolution within the existing institutional environment.
Bitcoin Financialization: Integrating into the Global Financial System.
In the wave of accelerated change in the global financial system, Bitcoin is undergoing a profound financialization process, gradually evolving from a controversial digital currency to a widely recognized financial asset deeply integrated into the global financial system.
In recent years, the trend of Bitcoin's financialization has become increasingly significant, demonstrating strong development momentum across multiple dimensions. From an asset allocation perspective, more and more institutional investors are beginning to recognize the value of Bitcoin and include it in their asset portfolios. According to relevant data, many well-known hedge funds, family offices, and asset management companies have allocated Bitcoin to varying degrees. This phenomenon indicates that Bitcoin is no longer merely a choice for niche investors; it is gradually entering mainstream investment consciousness and becoming an important part of diversified asset allocation.
In terms of financial product innovation, numerous financial products related to Bitcoin have emerged. In addition to traditional spot trading, the Bitcoin futures and options markets are also constantly developing. The emergence of these financial derivatives not only provides investors with more investment options and risk management tools but also further enhances Bitcoin's market liquidity and price discovery functionality. For instance, the introduction of Bitcoin futures allows investors to amplify their returns through leveraged trading while providing a means for market hedging, reducing investors' risks.
Bitcoin's application in the payment field is also gradually expanding. Some merchants have begun to accept Bitcoin as a payment method, especially in emerging digital economy sectors, where Bitcoin's payment advantages are fully demonstrated. Its decentralized, fast, convenient, and low-cost features make cross-border payments more efficient, bringing new possibilities for global trade and business activities. Some online retailers, digital service providers, and even some physical merchants have started to support Bitcoin payments; this trend is expected to further expand in the future.
However, the financialization process of Bitcoin is not smooth sailing and still faces many challenges. Market and liquidity risks are among the main challenges Bitcoin faces. The high volatility of Bitcoin prices puts investors at significant risk. In times of severe market fluctuations, the price of Bitcoin may drop significantly in a short period, leading to a substantial decrease in investor assets. The liquidity of the Bitcoin market is relatively low, especially in extreme market conditions, where trading congestion and price slippage may occur, affecting investors' trading experience and asset security.
The uncertainty in the regulatory environment is also a significant obstacle facing the financialization of Bitcoin. Due to Bitcoin's decentralized nature and the convenience of cross-border transactions, it presents a huge challenge for regulation. Different countries and regions have varying regulatory attitudes and policies towards Bitcoin; some adopt a proactive and open stance, supporting the development and innovation of Bitcoin, while others impose strict regulatory measures due to concerns over financial stability, anti-money laundering, and anti-terrorism financing. This regulatory uncertainty restricts Bitcoin's development on a global scale and increases the risks for investors.
In terms of technological maturity, Bitcoin also faces some issues. Although blockchain technology, as the underlying technology of Bitcoin, has advantages like decentralization and immutability, there are still some technical bottlenecks in practical applications, such as slow transaction processing speeds and high energy consumption. These technical problems not only affect the user experience of Bitcoin but also limit its promotion in large-scale commercial applications.
Despite facing challenges, the financialization of Bitcoin has also brought numerous opportunities. The financialization of Bitcoin helps to drive innovation and reform in the global financial system. It breaks the shackles of the traditional financial system, bringing new ideas and models to the financial market and promoting innovation in financial products and services. For example, the emergence of Bitcoin has spurred the development of decentralized finance (DeFi), which realizes the decentralization of financial services through smart contracts, providing users with more fair, transparent, and efficient financial services.
The financialization of Bitcoin also provides investors with more investment opportunities and asset allocation choices. In the context of increasing uncertainty in the global economy, Bitcoin, as an asset with relatively low correlation to traditional assets, possesses certain hedging properties. Investors can diversify their assets by allocating Bitcoin, reducing the risk of their investment portfolios. The financialization of Bitcoin also offers opportunities for financial innovation and development in emerging markets and developing countries, helping to enhance the financial inclusiveness and economic development levels of these nations.
Regulation plays a crucial role in the financialization process of Bitcoin. On one hand, appropriate regulation can standardize the development of the Bitcoin market, protect investors' legitimate rights and interests, and prevent financial risks. For example, regulatory agencies can establish relevant laws and regulations to clarify Bitcoin's legal status, trading rules, anti-money laundering, and anti-terrorist financing requirements, providing institutional guarantees for the healthy development of the Bitcoin market. Regulatory agencies can also strengthen oversight of Bitcoin trading platforms and related financial institutions to ensure their compliance, preventing market manipulation, fraud, and other illegal activities.
On the other hand, regulation can also create a favorable development environment for the financialization of Bitcoin. Some countries and regions have established innovative regulatory mechanisms such as regulatory sandboxes to provide space for experimentation and development for Bitcoin-related innovative projects. In regulatory sandboxes, innovative projects can pilot under certain regulatory frameworks, allowing regulatory agencies to timely identify issues and adjust policies, thereby encouraging innovation while effectively preventing risks. As the global regulatory system gradually improves and converges, Bitcoin is expected to realize financial development in a more standardized and orderly environment, better integrating into the global financial system.
Conclusion: Seize Opportunities and Move Forward Steadily.
In this field full of opportunities and challenges, investing is not easy; investors need to maintain rationality and calmness, deeply understand the market, and only then can they move steadily forward in this complex and ever-changing environment.
Bitcoin, stablecoins, and platform tokens, known as the 'three treasures of cryptocurrency,' form a solid cornerstone of cryptocurrency investment. Bitcoin, with its unique decentralized characteristics and scarcity, has become the core of value in the cryptocurrency world and the market's trump card, serving as the foundation of value in the digital age, safeguarding investors' wealth baseline. Stablecoins, with their price stability and high liquidity, serve as the key hub for capital flow and a safe harbor for investors, helping them control the pace of the market and achieve safe hedging and flexible allocation of funds amid market fluctuations. Platform tokens are closely tied to the development of exchanges, providing rich application scenarios and investment logic bound to platform growth, offering investors opportunities to participate in the development of exchange ecosystems, and becoming a channel for investors to win alongside large platforms. Reasonably allocating these 'three treasures' can construct a relatively stable investment portfolio, reducing investment risks and enhancing the stability of investment returns.
In the investment process, it is crucial for investors to maintain rationality and calmness. The cryptocurrency market is highly volatile, with price fluctuations occurring in an instant, easily triggering investors' greed and fear. However, investment decisions influenced by emotions are often dangerous. Investors should abandon blind following and speculative psychology, remain unaffected by short-term price fluctuations, and avoid blindly chasing profits. When faced with various temptations of '10x coins' or '100x dogs' in the market, one must keep a clear mind, deeply analyze the fundamentals of projects, and not easily be deceived by false promotions and promises. At the same time, one should be wary of market manipulation and fraud, and not easily trust so-called 'insider information' and 'guaranteed profit' investment advice.
Deep understanding of the market and projects is key to investment success. Investors should continuously pay attention to market dynamics, including price trends of mainstream cryptocurrencies like Bitcoin, overall market changes, policy and regulatory adjustments, etc. By analyzing and studying market data, they can grasp the development trends of the market and provide a basis for investment decisions. For specific investment projects, comprehensive due diligence is necessary. Understanding factors such as the project team's background, technical strength, application scenarios, and market competitiveness is essential to assess the project's potential value and risks. Taking the Ethena project as an example, investors need to deeply understand its business model, sources of income, risk factors, and its relationship with the Ethereum ecosystem in order to judge its investment value.
With the continuous development and application of blockchain technology, the cryptocurrency market is also evolving. The increase in Ethereum's gas limit brings new breakthroughs to the transaction efficiency and scalability of the blockchain, which may trigger a series of changes in the entire cryptocurrency ecosystem. The financialization process of Bitcoin is also accelerating, and its position and role in the global financial system are becoming increasingly prominent. These trends bring new opportunities and challenges for investors. Investors need to closely monitor technological innovations and development trends in the industry and adjust their investment strategies in a timely manner to adapt to market changes.
In cryptocurrency investment, there are no absolute shortcuts, nor is there immediate success. Investors should adhere to a sound investment philosophy, reasonably allocate assets, and control investment risks. While seizing opportunities, they must not forget risk prevention, achieving a balance between aggression and caution. Only in this way can they achieve steady growth of wealth in this uncertain cryptocurrency market and gain long-term investment returns.
