This is my third article discussing Bitcoin, currently priced at ¥18,000. My first two pieces were written in early 2013 (¥600) and late 2013 (¥6,000). Over the next three years, I held onto roughly 1–2 BTC. Later, in early 2016, I prepared a blockchain presentation and bought several dozen Ether (ETH) for slide screenshots—back when Ethereum was still obscure.
I first learned about Bitcoin in early 2012, fascinated by decentralized systems. Back then, BTC cost ¥40. It’s become a running joke: "When I first heard of Bitcoin, it was only XX yuan!" Since then, I’ve consistently held BTC, even working in Bitcoin-related roles. While technical expertise matters, the ultimate question lingers: What underpins Bitcoin’s value?
But first, let’s address another query: Why has Bitcoin surged recently (from ¥10,000 to ¥20,000)? Some blame forex controls, SegWit, or WannaCry, but the answer boils down to confidence. Prices rise because more people buy—and they buy because their trust in Bitcoin grows. This confidence stems from multiple sources: observing Bitcoin’s upward trajectory, recognizing its world-changing potential, or, most commonly, witnessing others’ faith. Your trust is reinforced by a network of believers, ensuring Bitcoin retains worth.
If you accept that Bitcoin’s price reflects collective confidence, it aligns with traditional notions of currency. The Chinese Renminbi (RMB), a fiat currency, holds immense trust—despite being paper or digital entries—because 1.4 billion people accept it. This stability stems from decades of reliable purchasing power, government backing, and, crucially, shared public confidence.
Why Is Bitcoin More Volatile?
- Smaller Market Cap: At ¥18,000/BTC, its total valuation is ~0.1% of RMB’s. Smaller markets are prone to manipulation.
- Decentralized Trading: Bitcoin’s global P2P exchanges allow rapid buying/selling in response to news, instantly reflecting price shifts. Fiat conversions, hindered by banks and regulations, lag in adjusting to sentiment.
Bitcoin’s rise exhilarates me. It’s a groundbreaking experiment: Can a decentralized, non-government currency gain mass acceptance? The trial continues, fueled by investments, GPUs, and ASICs. Beyond price, Bitcoin has spurred hundreds of altcoins, blockchain innovation, and hardware advancements—a legacy transcending speculation.
FAQ
1. What drives Bitcoin’s price?
Bitcoin’s value hinges on market confidence, adoption rates, and macroeconomic factors like inflation hedging. Unlike fiat, its capped supply (21 million BTC) adds scarcity-driven demand.
2. How does Bitcoin differ from traditional currencies?
Bitcoin operates without central banks, relying on blockchain technology for transparency and security. Its decentralized nature reduces government interference but increases volatility.
3. Is Bitcoin a good long-term investment?
Historical trends show resilience, but its high risk-reward ratio demands cautious diversification. 👉 Explore crypto investment strategies for balanced portfolios.
4. Can Bitcoin replace fiat currencies?
While possible, widespread adoption faces regulatory and scalability hurdles. Bitcoin currently complements rather than replaces traditional money.
5. What’s Bitcoin’s role in blockchain development?
As the first blockchain application, Bitcoin pioneered decentralized finance (DeFi), inspiring smart contracts, NFTs, and more. 👉 Learn about blockchain’s evolution.
6. Why do Bitcoin prices vary across exchanges?
Differences in liquidity, local demand, and trading volumes cause slight price disparities, arbitraged by traders for profit.