Bitcoin broke through the historical high this week. The Economist recently wrote an article analyzing that Bitcoin, which has been in existence for 14 years, has never been hacked. This means that Bitcoin will not disappear. After the launch of Bitcoin spot ETF, it may trigger an astonishing surge in the short term, but the long-term price trend may become slower and more stable.
Bitcoin broke through $70,000 on the evening of the 8th, setting a new historical high. The Economist recently wrote an article titled “What Will Happen After Bitcoin Soars” to analyze that Bitcoin’s rise is not isolated. Currently, all assets are rising, and stock markets around the world are approaching historical highs. The same goes for gold prices, and even bond prices are rising after experiencing two years of poor performance.
The catalyst behind the overall market rise is the AI frenzy, the optimism about the global economic situation, and the expectation of looser monetary policies in the future.
However, The Economist pointed out that Bitcoin’s performance is still better than most assets. This is mainly due to the approval of 11 Bitcoin spot ETFs by the SEC in January, making it easier for ordinary investors to buy Bitcoin. Currently, the total assets of the top 10 Bitcoin spot ETFs have reached $50 billion.
The article believes that Bitcoin has existed for 14 years and its self-validation and supply growth mechanism have never been hacked. This means that Bitcoin will not disappear. However, due to high transaction costs and slow transaction speeds, Bitcoin’s payment usage is quite limited. With the emergence of ETFs, it is evident that Bitcoin has become an investment asset.
Future trends are expected to be stable. The Economist mentioned that there are two theories in the market regarding Bitcoin’s trend. The first theory is that investing in Bitcoin is a broad bet on technological progress, reflecting the future of cryptocurrencies. The second theory is that Bitcoin is a limited-supply digital gold, and both theories may have some validity.
The article believes that if investors accept the inclusion of this mixed asset of technology stocks, cryptocurrencies, and gold in their asset allocation portfolios, Bitcoin may continue to rise for a period of time. However, when Bitcoin completes its transformation into standard financial assets, assuming that Bitcoin has become part of the portfolios of most investors and cryptocurrencies have not become truly popular, the long-term trend of Bitcoin will be similar to that of gold.