Bitcoin broke through the historical high this week, reaching 70,000 US dollars. An article in The Economist analyzed that Bitcoin has been in existence for 14 years and its mechanism has never been hacked. This means that Bitcoin will not disappear. The introduction of Bitcoin spot ETF may trigger a shocking surge in the short term, but the long-term price trend may become slower and more stable.
(Bitcoin, the Furious God! Bitcoin “Breaks through $70,000” Historical High and Quickly Plunges! Falls below $66,000 Again)
(JPMorgan: Bitcoin’s Weight in Volatile Investment Portfolio “Surpasses Gold”, Spot ETF May Attract £62 Billion within Three Years)
Bitcoin broke through 70,000 US dollars on the evening of the 8th, refreshing its historical high. The Economist recently wrote an article titled “What Will Happen After Bitcoin Soars” to analyze that Bitcoin is not rising in isolation. Currently, all assets are rising, stock markets in various countries are approaching historical highs, as well as gold prices. Even bond prices have risen after experiencing a two-year slump.
The catalyst behind the overall market rise is the AI boom, optimism about the global economic situation, and expectations of looser monetary policies in the future.
Nevertheless, The Economist pointed out that Bitcoin’s performance still surpasses 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 purchase Bitcoin. Currently, the total assets of the top 10 Bitcoin spot ETFs have reached 50 billion US dollars.
The article believes that Bitcoin has been in existence for 14 years, and its self-validation and supply growth mechanisms have never been hacked. This means that Bitcoin will not disappear. However, due to high transaction costs and slow transaction speeds, Bitcoin has limited payment uses. With the emergence of ETFs, it is obvious 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 the trend of Bitcoin. The first theory believes that investing in Bitcoin is a broad bet on technological progress, reflecting the prospects of cryptocurrencies themselves. The second theory believes 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 a standard financial asset, assuming that Bitcoin has become part of the investment portfolio of most investors and cryptocurrencies have not become truly popular, the long-term trend of Bitcoin will resemble that of gold.