After a period of relative quiet, the cryptocurrency Bitcoin has once again surged dramatically. Its price has been climbing for nearly three months, doubling in the last two months alone, and breaking through to around $8,000. This rally even pushed Bitcoin to trend on social media platforms.
Industry experts point out that volatility is inherent to Bitcoin's existence, and the risk of a bubble remains significant. The primary drivers behind this recent surge are increased uncertainties in global trade and regional geopolitical tensions.
A Return to Highs: The "Unkillable" Asset
"I’m not sure what to do next—it’s reached $8,000!" Recently, Bitcoin investor Liu Tong found himself at a crossroads. The value of his Bitcoin holdings rose from around $3,100 in late February to over $8,000, peaking with a gain of nearly 140%.
Having invested in Bitcoin since 2015, Liu has seen it all: the early days at a few thousand dollars, the historic high of nearly $20,000, and the brutal crash down to around $3,100. The current rebound brings new hope, but also hesitation. While $8,000 has helped recover losses from previous downturns, buying more seems risky, and selling now might mean missing out on further gains.
In fact, Bitcoin has been the top-performing asset globally this year. According to Huobi market data, Bitcoin started at around $3,487 on February 9, with a single-day jump of about 7%, and rose to a high of $8,343 by May 14—a gain of nearly 140% in three months. After a brief dip on May 17, which saw an 11.3% drop, prices stabilized and hovered around the $8,000 mark.
It's worth noting that the entire cryptocurrency market has been rising. Data from the Hu Blockchain Industry Weekly Report shows that from May 13 to May 19, the total market capitalization of global blockchain assets increased by 21.76%. Among the top 100 cryptocurrencies by market cap, 93 projects saw gains.
According to coinmarketcap, total global blockchain asset market capitalization reached $255.3 billion by May 19—roughly equivalent to the market cap of Disney.
"Bitcoin is fascinating. Most unconventional investment targets fade away after a crash, often with just one sharp decline. But Bitcoin is like an unkillable cockroach—it just won’t go away," remarked financial analyst Xiao Lei.
Four Major Crashes: Volatility as a Core Feature
Sharp fluctuations have been part of Bitcoin’s story since its inception.
Wind data shows that on January 6, 2013, one Bitcoin was worth just $13.15. By December 16, 2017, it had skyrocketed to a historic high of nearly $19,200. But soon after, it tumbled, falling to around $3,100 by February of this year.
Bitcoin has experienced four recorded "crashes." The first occurred between 2011 and 2012, when it rose from $0.95 to $32, then plunged to $2—a drop of 94%. The second was in April 2013, when it went from $13 at the start of the year to $250 in April, only to crash to around $40 in less than a week—an 80% fall. The third slump started in late 2013 from over $1,000, dropping to under $150 by early 2015—a decline of more than 85%. The fourth began in late 2017 around $20,000 and fell to nearly $3,100—a drop of about 85%.
"In 2011, there were almost no proper exchanges globally, and participants were mainly tech enthusiasts and a few risk-takers. Bitcoin was held by a very small group, and the market lacked sustainability. Even minor selling could cause a crash," analyzed Xiao Lei.
"The sharp fall starting in late 2017 was closely related to the launch of Bitcoin futures on the Chicago Mercantile Exchange. Futures trading meant Bitcoin entered the legitimate capital markets, but it also opened doors for more capital to short and influence prices," he said. Once the futures were listed, the major positive news was already priced in, and after hitting an all-time high, Bitcoin’s price began to fall rapidly.
"For a long time, Bitcoin could only exist in informal markets. In these environments, prices can be manipulated. Especially as traditional capital finds more ways to participate, the risk of manipulation increases. This is one of the biggest risks Bitcoin faces today," Xiao Lei noted.
Industry insiders believe that Bitcoin’s extreme price volatility is central to its survival. Repeated comebacks after major crashes reflect, to some extent, investors’ enduring greed for profits.
Broader Investment Channels and Growing Market Recognition
What’s behind the recent rapid rise in Bitcoin’s price?
Xiao Lei explains that the surge is driven by a global reassessment of risk assets and the expansion of investment channels for crypto assets. Recent volatility in stock and foreign exchange markets has prompted global investors to seek safe-haven assets. While traditional havens like gold rely more on real economic conditions and inflation expectations, Bitcoin acts more like a sensitivity index with certain hedging advantages.
At the same time, mainstream international investment institutions have begun entering the cryptocurrency space, offering users related services. Recently, well-known companies like JPMorgan, Facebook, and IBM announced plans to explore cryptocurrencies, gradually restoring market confidence through a series of positive developments.
JPMorgan’s involvement is particularly symbolic. As a leading global financial services institution, its plans to issue a cryptocurrency mark a significant milestone—it would be the first major U.S. bank to use a digital currency in practical applications. Guo Yuhang, Chairman of the China Blockchain Application Research Center, noted that JPMorgan has consistently focused on fintech innovation. Blockchain is one of the hottest areas in fintech, and in 2018 alone, JPMorgan invested approximately $5 billion in blockchain applications and investments.
"JPMorgan’s interest in blockchain is likely defensive. Over the past three years, the CEO has made several public statements about blockchain and digital currencies, gradually shifting from denial to acceptance," Guo analyzed. Reports indicate that JPMorgan has filed 175 patent applications with the U.S. Patent Office for "Bitcoin alternatives."
Ma Yuan Tian, a researcher at Huobi, agrees that as blockchain technology gains wider recognition, Bitcoin’s value has increased compared to the past. "We see mainstream financial institutions and tech companies, both domestically and internationally, gradually affirming blockchain and exploring ways to apply it in the real economy."
Additionally, Bakkt, a cryptocurrency trading platform developed by Intercontinental Exchange (owner of the NYSE), recently announced it is moving forward with plans for physically-settled Bitcoin futures products. User acceptance testing is scheduled to begin in July. In the long run, this will make it easier for individual and institutional investors to access Bitcoin-related products, representing a substantive positive development.
Analysts also note that rising uncertainties in global trade and economic development, along with increased regional conflict risks, have contributed to the surge. As European and U.S. stock markets dipped, Bitcoin—like gold—rose on safe-haven demand, accelerating its recent gains.
Regarding Bitcoin’s future prospects, Xiao Lei points out that the demographic of Bitcoin holders is changing. The base of tech enthusiasts, risk-takers, and retail investors dreaming of quick riches is gradually shifting, with high-net-worth individuals increasingly participating. However, he cautions that this structural change won’t happen overnight—it will require repeated price fluctuations to incentivize existing holders to sell and new investors to enter.
"Some泡沫 still exists in the blockchain industry, and it needs proper guidance," Ma Yuan Tian advised. Regardless of how cryptocurrency prices fluctuate, it’s important to focus on and encourage the development of blockchain technology itself, promoting its integration with real industries and driving sustainable growth in the real economy.
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Frequently Asked Questions
What caused Bitcoin’s recent price surge?
The recent rise is largely due to increased global trade uncertainties and geopolitical tensions, which drove investors toward alternative assets. Broader institutional adoption and positive developments in blockchain technology have also boosted confidence.
How does Bitcoin’s volatility compare to traditional assets?
Bitcoin is significantly more volatile than most traditional assets like stocks or bonds. Its price can swing dramatically in short periods, reflecting both market sentiment and its relatively limited liquidity compared to established markets.
Is Bitcoin a safe investment during economic uncertainty?
While some investors view Bitcoin as a digital hedge, it remains highly speculative and risky. Its price is influenced by factors different from traditional safe havens, and past performance doesn’t guarantee future results.
What role do institutional investors play in Bitcoin’s market?
Institutional involvement has grown, adding legitimacy and liquidity. However, it also introduces new dynamics, including potential price manipulation and increased correlation with traditional financial markets.
Can blockchain technology thrive regardless of Bitcoin’s price?
Absolutely. Blockchain has applications far beyond cryptocurrencies, including supply chain management, finance, and data security. Its long-term value is separate from short-term price movements in Bitcoin.
How can investors stay informed about cryptocurrency trends?
Following reputable news sources, understanding market fundamentals, and using reliable analysis tools are key. Always be cautious and avoid making decisions based solely on short-term hype or fear.