The Truth About Cryptocurrency Value: From Zero to $100,000 Transformation

By the end of 2024, Bitcoin breaks through the $100,000 mark, igniting the global financial markets. But many investors are still asking: what makes this thing valuable? What is the underlying logic? Is there still opportunity ahead? This article starts from the practical applications of Bitcoin, analyzing its fundamental value and current market situation.

Why Do Virtual Currencies Have Value? First, Look at What They Can Do

The reason Bitcoin has risen from zero to its current high is because it possesses four tangible functions:

Payment Tool
Like fiat currency, anyone can use Bitcoin to buy things. The first publicly recorded transaction was in May 2010, when a programmer used 10,000 BTC to buy two pizzas, officially breaking the “zero value” curse and giving Bitcoin an initial price.

Investment Asset
In July 2010, the world’s first digital asset trading platforms launched, allowing people to buy Bitcoin just like stocks. This provided investment channels for retail and institutional investors and became a key driver of price increases.

Financing Tool
Companies and projects can raise funds using Bitcoin. In 2014, well-known blockchain projects raised capital this way, pioneering virtual currency financing.

Store of Value
Known as “digital gold,” many wealthy individuals and institutions hold Bitcoin as part of their asset allocation to hedge against inflation.

These four functions form the cornerstone of virtual currency value—not just imagination, but real usability.

From Zero to $100,000: Who Are the Market Drivers?

The remarkable surge in Bitcoin’s price is driven by five core factors:

1. The Natural Advantage of Scarcity
Bitcoin’s total supply is forever capped at 21 million coins, embedded in the protocol. Over time, the “halving” events every four years further slow new coin issuance. This digital scarcity makes Bitcoin a preferred hedge against inflation. Especially amid ongoing loose monetary policies by global central banks, capital continues to flow into the virtual currency market for safety.

2. Large-Scale Institutional Investment
From 2024 to 2025, Wall Street’s attitude has shifted. Bitcoin spot ETFs launched by major asset managers have surpassed $20 billion in just 137 days. Funds from Fidelity, Ark Invest, and others have absorbed huge capital. This has transformed Bitcoin from a “speculative asset” into a “mainstream investment target,” with significant credit endorsement effects.

3. Geopolitical and Currency Risks
Conflicts in Ukraine, instability in the Middle East, and worsening US debt issues have prompted global capital to seek safe havens outside traditional financial systems. Bitcoin’s decentralized nature is especially attractive at this time, with emerging markets showing particularly strong demand.

4. Technological Upgrades Enhancing Practicality
The 2023 Taproot upgrade improved Bitcoin’s privacy and smart contract capabilities; the Lightning Network’s proliferation made small transactions more efficient; by 2025, many e-commerce platforms have integrated Bitcoin payments, significantly reducing transaction costs. Technological progress directly translates into expanded applications, boosting actual demand.

5. Shift from Regulation Bans to Regulation Frameworks
Some sovereign countries have incorporated Bitcoin into their legal currency systems or reserves; major economies worldwide are jointly establishing clear regulatory frameworks, removing compliance uncertainties. This greatly attracts institutional participation, with compliant trading volume expected to account for over one-third of global virtual currency trading after full European regulation implementation.

Is There Still Imagination for the Future? Three Perspectives

Technological Cycle Perspective
Bitcoin completed its fourth halving in April 2024. Historically, after the first three halvings, Bitcoin experienced maximum increases of 95x, 30x, and 8x respectively. Even conservatively estimating a 3–5x increase in this cycle, the price could challenge $150,000 to $300,000. The technological cycle has just begun to ferment, with peaks expected around late 2025 to early 2026.

Market Signal Perspective
By mid-2025, open interest in Bitcoin futures surpassed $17 billion; options market liquidity rivals that of traditional gold; institutions in Japan, Texas, and elsewhere are evaluating allocating some assets to virtual currencies. The depth and breadth of institutional entry are increasing.

Policy Clarity Perspective
The US and EU are shifting from “ban” to “constructive regulation,” adopting a “registration + disclosure” model. This means more compliant fund products will be approved for listing. After the European regulatory framework is fully implemented, compliant trading volume is expected to account for over one-third of global virtual currency trading.

Three Major Risks to Watch Out For

Quantum Computing Threat
If scalable quantum computers are realized in the future, existing encryption schemes could face cracking risks. Although industry estimates suggest this risk may only materialize in the late 2030s, the Bitcoin community is already evaluating alternative cryptographic solutions.

Market Structural Fragility
The virtual currency market heavily relies on leverage trading, with significant liquidation risks. In March 2025, over-leverage caused a single-day drop of more than 25%. Such black swan events can happen at any time.

Changing Competitive Landscape
Other virtual currencies like Ethereum are also upgrading, attempting to create narratives of “super-deflationary assets.” As new competitors emerge, the narrative of Bitcoin as “digital gold” may be weakened.

The Correct Approach to Investing in Bitcoin

The virtual currency market has evolved from wild growth to regulated development, but the investment logic must be clear. First, ask yourself: are you a long-term or short-term investor? This directly affects your return expectations.

Long-term Investment (4 years or more): Low time cost, low transaction fees, less trading knowledge required, suitable for most beginners.

Medium to Long-term Investment (1–3 years): Requires certain trading skills and market intuition.

Short-term Investment (less than 1 year): Demands high technical analysis and market psychology skills, with concentrated risks.

The golden rule for beginners is: allocate no less than 80% of your portfolio to long-term holdings, and limit short-term speculative operations to no more than 20%. Even if you lose all in short-term trades, profits from long-term holdings can cover losses. Once your plan is set, stick to it strictly; otherwise, chaotic trading can ruin your mindset and lead to final losses.

Conclusion

Bitcoin’s rise from zero to today’s high is fundamentally a result of scarcity, institutional recognition, and global demand. $100,000 is not the end, but investors must constantly monitor market cycles, regulatory developments, and technological risks. In the current regulatory environment, virtual currencies can serve as an asset allocation tool for diversification—but only with rational allocation, never all-in. This is the correct posture for long-term profits in the virtual currency era.