Bitcoin broke through the historical high of $70,000 this week. An analysis by The Economist suggests that Bitcoin, which has been in existence for 14 years, has never been hacked, indicating that it will not disappear. The launch of Bitcoin spot ETF may trigger a short-term astonishing surge, but the long-term price trend is expected to be slower and more stable.
Bitcoin surged past $70,000 on the evening of the 8th, setting a new historical high. The recent article by The Economist titled “What Will Happen After Bitcoin Soars” analyzes that Bitcoin’s rise is not isolated. Currently, all assets are rising, with stock markets around the world approaching historical highs, as is the price of gold. Even bond prices are climbing after experiencing a two-year slump.
The catalyst behind the overall market rise is the AI boom, optimism about the global economic situation, and expectations of looser future monetary policies. However, The Economist points out that Bitcoin’s performance still outperforms most assets. This is mainly due to the approval of 11 Bitcoin spot ETFs by the SEC in January, making it easier for ordinary investors to buy Bitcoin. The total assets of the top 10 Bitcoin spot ETFs have reached $50 billion.
The article states that Bitcoin has been in existence for 14 years, and its self-validation and supply growth mechanism have never been hacked. This means that Bitcoin will not disappear. However, due to high transaction costs and slow transaction speed, Bitcoin’s payment usefulness is quite limited. With the advent of ETFs, Bitcoin has clearly become an investment asset.
Future trends are expected to be stable. The Economist mentions two theories in the market regarding Bitcoin’s trend. First, investing in Bitcoin is a broad bet on technological progress, reflecting the prospects of cryptocurrencies. Second, Bitcoin is seen as a scarce digital gold. Both theories may have some validity.
The article believes that if investors accept a portfolio that includes a mix of technology stocks, cryptocurrencies, and gold, Bitcoin may continue to rise for a period of time. However, when Bitcoin completes its transformation into a standard financial asset, assuming that Bitcoin has become part of most investors’ portfolios and cryptocurrencies have not truly become popular, the long-term trend of Bitcoin will resemble that of gold.