Why can Bitcoin reach $100,000 per coin? Why is $100,000 just the beginning for Bitcoin?
Bitcoin has officially surpassed $100,000 on December 5, 2024, and this may only be the beginning. In the past year, BTC has risen by more than 2 times; in the past three years, it has risen by nearly 6 times; in the past five years, it has risen by nearly 20 times; in the past ten years, it has risen by 500 times; and in the past fifteen years, since Bitcoin Pizza Day, it has risen by 40 million times. Bitcoin has always been at a new starting point for sixteen years.
During these sixteen years, Bitcoin has been attacked by governments around the world, but has gradually been accepted and even openly supported by governments. It has been questioned by the public and yet more people have held it. In 2024, the number of users on the Binance cryptocurrency exchange alone exceeded 210 million. Every time people think that Bitcoin has reached its peak and is approaching the end, it has proven to be a new beginning.
The narrative and significance of Bitcoin itself have also been evolving, and people’s views on Bitcoin have been changing. Fifteen years ago, it was just a small experiment for cryptographers, and a programmer from Florida used 10,000 Bitcoins to buy two pizzas. Ten years ago, it was just a payment method for illegal transactions such as gambling, drugs, and money laundering, and most of its use cases were for illegal transactions. Five years ago, it, along with the cryptocurrency industry, gradually grew into a new financial system. In this system, there is the “crypto Nasdaq” (Ethereum), “crypto bank” (Tether, Ethena), “crypto securities company” (Binance), and an account system (Metamask). Each product has tens of millions or even billions of users, and it has almost all the infrastructure and products of the traditional financial industry, but it is more efficient, streamlined, transparent, decentralized, and globalized. Three years ago, the cryptocurrency industry expanded into Web3 applications, combining the next generation financial system with the next generation internet system, becoming its new mission.
Nowadays, more people believe that Bitcoin is like gold. Bitcoin’s market value has exceeded $2 trillion, surpassing the market value of silver and accounting for one-tenth of the market value of gold. Bitcoin has been recognized and supported by sovereign countries such as the United States and Japan. And this process only took sixteen years. What is even more astonishing is that the blockchain technology behind Bitcoin has spawned a whole new financial and internet ecosystem. These numerous institutions in the two ecosystems continue to promote the popularization of Bitcoin, making it truly possible to become a global currency.
When Bitcoin reaches the high point of $100,000, everyone raises a common question: Is Bitcoin approaching the end? How far is Bitcoin from the end? Will Bitcoin have a new narrative?
There are still 5 billion internet users who have not yet encountered Bitcoin. $100,000 is still just the beginning for Bitcoin, and this time Bitcoin will welcome new “buyers”.
The biggest new buyers this year are undoubtedly the world’s largest fund BlackRock and the major buyers behind funds such as BlackRock – American companies and institutions.
In January 2024, the United States approved a BTC ETF, which means that listed companies, pension funds, BlackRock funds, Stanford University, and other institutional investors in the United States can publicly purchase and hold Bitcoin through ETFs issued by BlackRock and other funds. The approval of the BTC ETF in the United States triggered a wave of large institutions buying Bitcoin. Global large companies rushed to buy Bitcoin, and within 10 months, $100 billion flowed into the BTC ETF in the United States. Bitcoin also surged from over $40,000 to $100,000, largely due to the approval of the BTC ETF in the United States, allowing US institutions to buy Bitcoin through legal channels. The approval of the BTC ETF in the United States and its subsequent performance in the past 10 months have become a miracle in the history of ETFs.
When Bitcoin rises from $100,000 to $200,000, what new buyers will enter the market?
Firstly, from the perspective of institutions, the institutions currently buying Bitcoin are still mainly from the United States. The US Bitcoin spot ETF continues to attract capital inflows at a scale of tens of billions of dollars per month, and there is no sign of stopping. US and global companies and institutions will continue to buy Bitcoin through the Bitcoin spot ETF.
From a global perspective, major economies such as Japan, Europe, and China have not completely lifted restrictions on institutional purchases. Once major economies lift these restrictions, it will be another leap forward. According to the well-known “Time Machine Theory,” innovative assets and mechanisms tend to spread from the United States to developed countries and eventually to developing countries. Whether it is assets and mechanisms in the financial field, such as gold, the Nasdaq listing mechanism, SPAC listing mechanism, or technological advancements in the internet, chips, mobile phones, and new energy vehicles, they often follow the Time Machine Theory.
Secondly, from the perspective of ordinary people, the adoption rate of Bitcoin is still far from enough. According to estimates by the well-known Silicon Valley investment firm a16z, there are currently approximately 30 to 60 million active cryptocurrency users worldwide each month. Even if this range is expanded to include users who have owned cryptocurrencies, according to Crypto.com’s analysis in April 2024, there are 610 million cryptocurrency users worldwide. With a world population of 8.2 billion, of which 5.4 billion people use the internet, approximately 5 billion internet users have not experienced cryptocurrency products.
The cryptocurrency industry hopes to form a global new financial system and internet system, allowing everyone to use cryptocurrency products just like internet products. In 2024, there are 5.4 billion people using the internet, but there are only 610 million cryptocurrency users, indicating a huge potential market. The cryptocurrency industry is changing this situation, and it is changing the financial and internet systems.
When the cryptocurrency industry becomes as popular as the internet industry is now, Bitcoin will reach ten times the current population.
Lastly, there is a more critical buyer: sovereign countries.
After El Salvador, Bitcoin is expected to become the reserve asset of more and more sovereign countries. Especially after Trump was elected as the President of the United States, major economies such as China, the United States, Japan, Europe, and the United Arab Emirates are expected to accelerate the adoption of Bitcoin as a national reserve asset, which will bring about another leap for Bitcoin.
It is not unfounded for major countries to personally buy Bitcoin. On November 22, according to Reuters, Trump’s “Cryptocurrency Advisory Committee” plans to establish a committed Bitcoin reserve. Trump has openly supported Bitcoin and the cryptocurrency industry on multiple occasions. During his campaign, Trump made commitments to support cryptocurrency measures, such as including Bitcoin in national reserves, making the United States the cryptocurrency capital of the world, and relaxing regulations. Trump’s proposals have received support from some political and industry experts. For example, US Senator Cynthia Lummis has proposed a bill to establish a strategic Bitcoin reserve, with the goal of acquiring 1 million BTC within five years and holding it for at least 20 years to hedge against US national debt.
When the United States makes Bitcoin a reserve asset, most countries around the world are also expected to allocate a corresponding proportion of Bitcoin assets, just like with gold.
In conclusion, whether it is the 5 billion internet users, the continuous inflow of $10 billion per month from major institutions buying Bitcoin spot ETFs, or sovereign wealth funds, they will be potential buyers of Bitcoin and the key “buyers” for Bitcoin to rise from $100,000 to $200,000.
$100,000 is just the beginning.
$100,000 is just the beginning for Bitcoin. If Bitcoin wants to rise from $100,000 to $200,000, it not only needs new buyers but also a new group of believers and builders to expand Bitcoin’s reach network.
Cryptocurrency practitioners may be one of the most exploratory groups in the world. They need to understand various blockchain technologies such as ZK, as well as the new trends in various technology industries such as AI, VR, and the metaverse. They not only need to deeply understand US politics and elections, the timing and magnitude of interest rate cuts by the US Federal Reserve, cryptocurrency policies in Hong Kong and Singapore, but also constantly pay attention to various macro events such as wars, economic crises, and stock market fluctuations. They need to understand the differences between public chains such as Bitcoin, Ethereum, Solana, Sui, and Base, and be familiar with concepts and tracks such as Web3 social, Web3 games, DeFi, and NFT.
From ICOs to DeFi, to NFTs, and now to mass adoption, cryptocurrency practitioners continuously expand the boundaries of the blockchain network, allowing cryptocurrency assets such as Bitcoin to truly circulate globally and generate value.
Many people ask, what is the significance of Bitcoin and cryptocurrencies? Why do so many people join the cryptocurrency industry? I often answer that when the value of the national currency in Argentina depreciates by more than 50% every year, companies like Binance and Tether provide stablecoins to protect the assets of Argentinians from significant depreciation. This is the significance of Bitcoin’s existence. When people want to transfer money to their family and friends across borders, but the traditional economic and political systems have set up numerous barriers that require high fees and long waiting times, this is the significance of Bitcoin’s existence. When as an entrepreneur of a startup company, it is difficult to collaborate with employees from different countries with different currencies and systems at a low cost within the existing system, this is the significance of Bitcoin, cryptocurrencies, and blockchain.
Bitcoin creates value and continues to explore the possibilities of creating new value, from building a new financial system to building a new internet system. This path has only been partially completed, and new builders still have a long way to go.
In conclusion, the events of rushing to buy rice immediately after receiving a salary have been happening throughout history, in every corner of the world. Some countries experience milder symptoms, such as China, Japan, and the United States, while others experience more severe symptoms, such as Argentina. Some countries may worsen their symptoms at any time, such as Russia and Ukraine. Every individual and country has both good and bad sides. The existence of countries has both good and bad sides. The emergence of the internet has prevented most countries from arbitrarily blocking information, fighting against the evil side of the country. The emergence of Bitcoin has prevented most countries from arbitrarily increasing the issuance of money, fighting against the evil side of the country. And countries cannot stop Bitcoin because Bitcoin is just a technology, a tool. As Russian President Putin said at the Russia Calling Forum on December 4, “Who can prohibit Bitcoin? No one can. Who can prohibit the use of other electronic payment methods? No one can. Because these are all new technologies.”
This is why Bitcoin can reach $100,000 per coin.
This is also why it is said that $100,000 is still just the beginning for Bitcoin.