Bitcoin crashes, should you run for your life or buy the bottom?

Nakamoto 2025-9-24 14:35 46815人围观 BTC

↑Click the star above for Sanlian Life Weekly! Bitcoin, which once rose wildly, finally collapsed! After recent consecutive plummets, the price of Bitcoin fell to US$4,400, a drop of nearly 80% compared to the high of US$20,000 at the beginning of the yea

↑Click the star mark above for Sanlian Life Weekly!

Bitcoin, which once rose wildly, finally collapsed!

After recent consecutive plummets, the price of Bitcoin fell to US$4,400, a drop of nearly 80% compared to the high of US$20,000 at the beginning of the year. Those currency players who fantasize about changing their lives through Bitcoin may really have their lives changed this time.

Of course, this is not the first time Bitcoin has plummeted in history. Several plummets in the past have ultimately led to larger increases. So, after this plunge, will Bitcoin repeat its past rebound? For players in the currency circle, should they run away or fight for the bottom?

In the early hours of yesterday morning, the Bitcoin quotation on the Coinbase platform hit a 13-month low.

The several plunges in the history of Bitcoin were basically caused by the suppression of external factors. Each plunge had an obvious trigger. However, this plunge did not have obvious external negative effects, but was more about the return of Bitcoin's own value. We might as well briefly review the several sharp rises and falls in the history of Bitcoin, which may help us better understand the current trend.

In 2013, Bitcoin rose from $15 at the beginning of the year to over $1,200 at the end of the year. This year is the year of enlightenment for players in the Chinese currency circle. A large number of Chinese players began to enter the market in large numbers in 2013.

In December of that year, five ministries and commissions including the People's Bank of China and the China Banking Regulatory Commission jointly issued the "Notice on Preventing Bitcoin Risks." The "Notice" stated that Bitcoin is a specific virtual commodity that does not have the same legal status as currency and cannot and should not be used as currency in the market. The five ministries and commissions also require that financial institutions and payment institutions shall not price products or services in Bitcoin, and shall not provide Bitcoin-related services to customers. After the notice was issued, Bitcoin plummeted 35%, and the price of Bitcoin plummeted. By 2015, the price of Bitcoin fell to US$200, a drop of more than 80% in a year and a half.

Starting from the second half of 2015, Bitcoin rebounded strongly again, with an increase of more than 260% in 2016. By the beginning of 2017, the price of Bitcoin hit a new all-time high. At this time, China has become a major player in the global Bitcoin market, and Bitcoin trading volume from China accounts for more than 90% of the global share.

Picture | Photo Network

History always has surprising coincidences. After Bitcoin hit a new all-time high, Chinese regulators took action again. At the beginning of 2017, the People's Bank of China and its Shanghai headquarters interviewed the three largest Bitcoin exchanges in Beijing and Shanghai respectively, and subsequently conducted on-site inspections of the exchanges. This time, the price of Bitcoin fell by nearly half within 8 trading days.

In September last year, the regulatory authorities officially decided to close domestic Bitcoin exchanges. Bitcoin prices plunged again, and then quickly reached a record high, once exceeding US$20,000 at the beginning of this year.

Judging from the past few years, Bitcoin's several plunges have largely come from external pressure, especially related to China's regulation. But this time, Bitcoin's plunge did not have any obvious external pressure. It was mainly a return of value after an excessive surge.

Picture | Photo Network

How valuable Bitcoin is has always been a highly controversial topic. Optimists believe that Bitcoin represents the currency of the future. Since it is related to the future, the room for growth is unlimited. Those who are not optimistic believe that Bitcoin is just a Ponzi scheme and its value will return to zero sooner or later. Buffett believes that the intrinsic value of Bitcoin is a joke, and Bill Gates also believes that Bitcoin does not create any value. If possible, he hopes to short Bitcoin.

So, is Bitcoin the currency of the future or a Ponzi scheme?

After Satoshi Nakamoto, the father of Bitcoin, created Bitcoin 10 years ago, Bitcoin did not gain much recognition in the real world. In 2010, an American young man exchanged 10,000 Bitcoins for only 2 pieces of pizza.

Bitcoin truly gained value recognition in the real world in 2013. This year, Cyprus fell into a debt crisis. The European Union required Cyprus to impose a deposit tax on domestic savers in exchange for aid, which aroused strong dissatisfaction among the Cypriot people. The Cypriot people's confidence in the monetary authorities and the euro has declined, and they have begun to rush to buy Bitcoin as a safe haven. Bitcoin has demonstrated the function of an alternative currency for the first time since its birth.

It should be said that Bitcoin at this time was still shining with the brilliance of idealism, which to a large extent reflected Satoshi Nakamoto’s original design intention of decentralization and combating inflation. It also placed people’s expectations for future currencies.

The Cyprus incident triggered the first major increase in the price of Bitcoin, with the price rising from $15 to $260 in just a few months. The skyrocketing price of Bitcoin began to attract the attention of Chinese buyers. From then on, Chinese buyers began to enter the market and became an important player in Bitcoin.

Bitcoin has since changed, evolving from an idealistic currency into a pure wealth game. Domestic currency circle tycoons show off their wealth in a high-profile manner, attracting countless little leeks to enter the market. The price of Bitcoin rose to $20,000 at the beginning of this year, a 20-fold increase in two years. The American guy spent 10,000 Bitcoins in exchange for two pieces of pizza, which was now worth $200 million.

There is a well-known saying in the stock market that if the market ladies around you start discussing stocks, it means that the market has peaked. The same situation occurs in the Bitcoin market. In the past year, as the price of Bitcoin has been rising, almost everyone has begun to discuss Bitcoin, which means that an avalanche is not far away. After reaching a new high at the beginning of this year, the price of Bitcoin began to plummet. Most of the novices who entered the currency circle in the past year suffered miserably.

A more severe test is that in the past, the price of Bitcoin skyrocketed because people placed religious beliefs in this "future currency". However, more and more events have shown that Bitcoin may not be as perfect as people imagined. Many things that are happening in this industry are precisely what Satoshi Nakamoto strongly opposed in the past.

Satoshi Nakamoto limited the number of Bitcoins to 21 million. His original intention was to express his dissatisfaction with the real-world monetary authorities' repeated releases and hoped that digital currencies could solve the inflation problem of traditional currencies. But in fact, as Bitcoin has become a wealth tool for players in the currency circle, Bitcoin has increased by as much as 20 times in 2 years, which is more inflated than any currency in the real world. How can such a digital currency that has skyrocketed and plummeted take on the task of replacing traditional currencies?

Another major feature that Bitcoin values most - decentralization - has been gradually destroyed in the past two years due to the interests of the oligarchs in the currency circle, and has become more centralized. Due to the lack of supervision in the Bitcoin world and the mysterious disappearance of Satoshi Nakamoto himself, today’s Bitcoin is not an ideal world where everyone is equal, but has become an arena where giants control the world, following the law of the jungle of “survival of the strong” just like the real world.

Picture | Photo Network

As the Bitcoin network has become increasingly congested in recent years, transaction costs have become higher and higher. As the founder of Bitcoin Continent, Wu Jihan, a tycoon in the currency circle, proposed to solve the problem by using large blocks. In theory, this solution is beneficial to the sales of Bitcoin mining machines, and Bitcoin Continent has a high monopoly in the global mining market.

Because the large block scheme was not recognized, Wu Jihan led the first hard fork of Bitcoin in August last year. The so-called hard fork, in layman's terms, means that people on the same front start a new business and go their separate ways due to reasons such as ideas or profit distribution. The result of this hard fork led by Wu Jihan is the birth of a new digital currency from Bitcoin - Bitcoin Cash, which is currently the fourth largest digital currency in the world.

After the Bitcoin Cash hard fork, internal disagreements quickly arose again. Craig Steven Wright, an Australian who has always claimed to be Satoshi Nakamoto, challenged Wu Jihan. On November 15 this year, the camps represented by "Satoshi Australia" and Jihan Wu launched a fierce computing power war, and Bitcoin Cash once again completed a hard fork. This endless struggle for interests among the oligarchs in the currency circle has also made the already weak digital currency even worse, and has contributed to the recent plunge of digital currency.

More and more people are beginning to realize that Bitcoin is not the ideal decentralization at all. In a digital currency world without supervision, when a few people have decisive power, digital currencies are actually more centralized than traditional currencies.

Bitcoin’s plunge can be regarded as a baptism of loyalty for players in the currency circle. If you still have religious faith in Bitcoin, this plunge is a God-given opportunity to buy the bottom. If your faith is shaken, it is better to run for your life quickly.

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