Bitcoin Frenzy and the Prosperity of the Crypto Assets Market

Since 2020, Bitcoin, which was once regarded as an "alternative" financial asset, has gradually gained acceptance from mainstream financial institutions and has evolved into one of the assets that institutions must consider for allocation.

A large digital asset management company is continuously purchasing scarce Bitcoin from the market. A Nasdaq-listed company invested $450 million in Bitcoin with 85% of its cash reserves, achieving considerable returns. A well-known new energy vehicle company announced an investment of $1.5 billion in Bitcoin, with returns far exceeding the total sales of new energy vehicles for the entire year of 2020. This has sparked a frenzy about Bitcoin from the company's founder, who once changed his social media profile to "bitcoin" and his avatar to an image featuring Bitcoin elements.

Since Bitcoin broke through the previous high of $20,000 on December 16, 2020, it skyrocketed to a historical high of $58,000 within just two months, an increase of nearly 300%. This round of crazy rise has attracted more mainstream institutions on Wall Street and big shots in traditional finance to change their bearish attitudes, all entering the Bitcoin and Crypto Assets space. This phenomenon is referred to as "being conquered by the surge".

Even mainstream domestic media financial programs have reported on the Bitcoin market trends.

Bull Market Year

Many outsiders do not understand why Bitcoin has surged so crazily in recent months. In fact, the principle is quite simple; it stems from Bitcoin's unique economic model.

Unlike fiat currencies that can be infinitely issued, Bitcoin has been capped at a total supply of 21 million coins since the release of its white paper in 2008, and it will never be increased. Under the premise of a fixed supply, the Bitcoin system adopts a distributed mining rule, allowing people around the world to obtain Bitcoin through mining equipment.

On January 3, 2009, Bitcoin's founder Satoshi Nakamoto mined the first block and received a reward of 50 Bitcoins, marking the official launch of the Bitcoin system. Since then, there has been a halving of production every four years, with three halvings occurring in 2012, 2016, and 2020; the current block reward is 6.25 Bitcoins.

It is precisely due to the fixed total supply and the continuous decrease in supply that the scarcity increases, which triggers a wave of bull markets in the crypto assets market after each halving.

Since the birth of the blockchain industry, the Crypto Assets market has experienced two major bull markets in 2013 and 2017, corresponding to the two halvings in 2012 and 2016. In the 2013 bull market, Bitcoin rose from $10 to $1200, an increase of over a hundred times; in the 2017 bull market, it rose from $995 to $19345, an increase of 18 times.

Since the third halving in May 2020, Bitcoin has risen from over $9,000 to nearly $60,000, an increase of six times. Compared to the previous two bull markets, the attitude of mainstream institutions and regulators towards Bitcoin is now more moderate, and the social consensus is significantly stronger and broader.

Therefore, 2021 is likely to welcome an unprecedented bull market.

Investment Risk Warning

Although the first two rounds of bull markets created a group of early investors who achieved financial freedom, more people have encountered losses, zeroing out, or liquidation. Not many have truly profited from it, and the main reasons are as follows:

1. Insufficient understanding and unwillingness to learn and think. Many people are easily deceived by various pseudo-blockchain projects due to their lack of understanding of blockchain technology. They should take the time to learn about blockchain knowledge and discern between legitimate and fake projects.

2. Excessive greed and enthusiasm for high leverage. Some people have found high-quality projects, but due to their desire for short-term profits, they excessively use leveraged contracts and ultimately lose everything. They should restrain their greed and invest steadily.

3. Chasing highs and selling lows, frequently changing positions. Some people have unstable mindsets, frequently chasing highs and selling lows, ultimately missing all opportunities. One should select quality projects in advance for long-term holding and engage in value investing.

In Crypto Assets investment, it is essential to continuously learn, enhance awareness, control greed, and adhere to value investing.

How to Participate

Despite Bitcoin rising from over $10,000 to nearly $60,000, this bull market may just be getting started. In previous bull markets, it was common for mainstream coins to rise by 50% in a single day or even double.

In addition to Bitcoin, investing in other mainstream coins may also yield considerable returns. For example:

• Ethereum ( ETH ): As a blockchain infrastructure, it supports applications such as DeFi and smart contracts. The last bull market saw an increase of nearly a hundred times, and this round has new applications and developments.

• Polkadot ( DOT ): A cross-chain project founded by the co-founder of Ethereum, which has performed well recently. Cross-chain technology plays an important role in the blockchain world.

• DeFi projects: such as Uniswap, Sushiswap, AAVE, etc., are key components of decentralized finance and are showing strong momentum.

Investing in Crypto Assets requires buying and selling through digital asset exchanges. The following large exchanges are recommended: Exchange Platform A, Exchange Platform B, Exchange Platform C, etc.

Digital assets purchased can be stored in exchanges or personal wallets. The following decentralized wallets are recommended: Wallet A, Wallet B, Wallet C, etc.

Conclusion

Despite the numerous opportunities in the Crypto Assets market in 2021, it is not recommended for those who have no understanding of blockchain to invest directly. The market risks remain high, and newcomers are more susceptible to shocks.

It is advisable to first learn about the basics of blockchain and Crypto Assets to increase risk awareness, and then carefully consider whether to participate in investments. Remember, investment requires rationality and should not be followed blindly. In this rapidly changing market, continuous learning and maintaining a cautious attitude are essential.