Bitcoin's 12-Year Development History: From Anonymous Creation to $40,000 New High

Since its inception in 2009, Bitcoin has gone through 12 years. This decentralized blockchain currency was created by Satoshi Nakamoto and aims to address the flaws of traditional centralized monetary systems. As stated by a major financial institution, a phenomenon that has sustained for 12 years should not be simply regarded as a bubble.

Recently, the value consensus of Bitcoin has been widely recognized. In early January 2021, the price of Bitcoin broke through the $40,000 mark, reaching a historical high of $41,940, more than doubling in value in just over a month. After that, Bitcoin touched the $40,000 high again, and this continuous record-breaking performance greatly invigorated the cryptocurrency market.

According to market data, as of January 20, the price of Bitcoin fluctuated around $35,000. This fluctuation is expected and aligns with market trends. Due to its characteristics such as decentralization and anonymity, the fluctuation range of the Bitcoin market is relatively wide. Data shows that the average daily volatility of Bitcoin is 3.75%. It is worth noting that on March 12, 2020, Bitcoin experienced an extreme situation with a one-day drop of over 50%.

The entry of institutional investors has become an important factor in stabilizing the Bitcoin market. Unlike the bull market in 2017, which was primarily driven by retail investors, this round of increases is more attributed to the participation of institutional investors. Data shows that in mid-January 2021, 65 large Bitcoin transfers were monitored in just five days, of which 19 transfers were between anonymous wallets, totaling 92,201 Bitcoins, with a market value of approximately $3.5 billion.

Currently, only 0.00695% of Bitcoin addresses control 42.5% of Bitcoin. This increase in concentration indicates that institutional investors are having a significant impact on the Bitcoin market alongside long-term holders. This structural change further consolidates the value consensus of Bitcoin.

The core attributes of Bitcoin determine its lasting vitality. First of all, in terms of security, Bitcoin's design, from the underlying logic to all its components, is dedicated to strengthening the trust mechanism. Theoretically, only by controlling more than 51% of the computing power can the system be cracked, and the countless failed attacks over the past 12 years are the best proof of its security.

Secondly, the scarcity and non-replicability of Bitcoin are also important supports for its value. The total supply of Bitcoin is capped at 21 million, and it is expected to stop mining by the year 2140. This artificially set scarcity makes it an extremely attractive investment target. It is worth mentioning that due to reasons such as lost private keys, approximately 3.7 million Bitcoins (accounting for 20% of the circulating supply) are currently considered permanently lost, which further increases the scarcity value of existing Bitcoins.

The high volatility of the Bitcoin market stems from its characteristics of decentralization and anonymous transactions. Unlike traditional financial markets, Bitcoin transactions are not subject to limits on price fluctuations or circuit breakers, allowing the market to more directly reflect real economic factors.

Currently, mainstream financial institutions show a clear divergence in their attitudes towards Bitcoin. Some institutions strongly support it, while others are strongly opposed. There are views that regulation will determine the fate of Bitcoin, and some predict that stablecoins may replace Bitcoin. However, these views remain debatable.

Bitcoin has truly existed for 12 years, and time is the best test. Various external factors may have a significant impact on Bitcoin, but these influences more highlight the value of Bitcoin rather than determine its survival. The future development of Bitcoin is still full of possibilities, and it is worth our continued attention and discussion.