Bitcoin hits a new high, institutional investors are actively getting on board.

Bitcoin, as a decentralized blockchain currency, has gone through 12 years since its inception in 2009. Its emergence stems from distrust in traditional centralized currency systems, aiming to provide an alternative that is not controlled by a single entity. Over the years, Bitcoin has gradually evolved from an experimental concept to a widely recognized digital asset.

Recently, the surge in Bitcoin prices has attracted widespread attention. In early January 2021, Bitcoin briefly broke through the $40,000 mark, setting a historical high of $41,940, more than doubling from a month ago. Although there was a subsequent pullback, it still maintained a high level around $35,000. Such drastic price fluctuations are not uncommon; data shows that Bitcoin's average daily volatility reaches 3.75%, having once plummeted over 50% in a single day in March 2020.

Compared to the bull market in 2017, the biggest feature of this round of increase is the active participation of institutional investors. Data shows that in early January 2021, there were several large transactions of Bitcoin worth over one hundred million dollars within just a few days. Currently, only 0.00695% of Bitcoin addresses control 42.5% of the circulating supply. The entry of institutional investors has not only brought in a large amount of capital but has also enhanced the stability of the market to a certain extent.

From the perspective of its essential properties, the security, scarcity, and non-replicability of Bitcoin are its core advantages. Although there have been incidents of trading platforms being hacked, the underlying protocol of Bitcoin itself has not been successfully breached to date, which fully proves its security. Moreover, the total supply of Bitcoin is fixed at 21 million coins, and it becomes increasingly difficult to mine over time; this scarcity makes it regarded as "digital gold."

It is important to note that the Bitcoin market still has significant volatility. As a completely free market, there are no price limits or circuit breaker mechanisms, and prices are entirely determined by supply and demand. Regarding the future of Bitcoin, there are still significant differences of opinion in the financial sector. Some people are concerned about regulatory risks, while others are optimistic about its long-term development prospects.

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Regardless, Bitcoin has existed for 12 years and has withstood the test of time. While external factors may have a short-term impact on it, they are unlikely to fundamentally shake the foundation of its existence. As a new asset class, the future development of Bitcoin is worth our continued attention.