The recent surge in Bitcoin's price has captured global attention, marking what can be considered a historic moment for cryptocurrency enthusiastsOn December 5th, Bitcoin reached an unprecedented milestone, breaking the $100,000 mark for the first time in its historyThis dramatic rise means that the cryptocurrency, which has been in existence for more than 15 years, is now approaching a market capitalization of nearly $2 trillion—an amount that is on par with the combined market values of influential corporations like Tesla and JPMorgan Chase.

Bitcoin's inception dates back to January 3, 2009, during a time when the world was still grappling with the aftereffects of the global financial crisisDubbed the "father of Bitcoin," the pseudonymous Satoshi Nakamoto launched this groundbreaking digital currency as a direct challenge to the traditional financial systemIn the "genesis block" of Bitcoin, Nakamoto included a message stating that the Chancellor was about to announce a second round of bank bailouts, voicing discontent with existing monetary systems

The vision was to create a currency free from government control and immune to manipulation, achieved through a concept known as miningIn Nakamoto's framework, miners employed computational power to compete for the right to add blocks to the blockchain, with the winners receiving Bitcoin rewardsAdditionally, the total amount of Bitcoin was capped at 21 million, with the issuance rate halved approximately every four years, projected to be fully mined by the year 2140.

Despite Bitcoin's rapid growth over the years, no major economy has officially recognized it as legal tender, with most authorities treating it as an asset rather than a currencyHu Jie, a professor at Shanghai Jiao Tong University's Shanghai Advanced Institute of Finance and a former senior economist at the Federal Reserve, articulated his perspective that Bitcoin and similar assets lack inherent utility, as they do not distribute cash to holders

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The fluctuations in Bitcoin's price are thus driven predominantly by speculative trading and the psychology of market participants.

The current rally in Bitcoin has been attributed to several favorable factorsHu Jie highlighted that there is increasing attention from government industrial policies towards the cryptocurrency sector, coupled with the ongoing easing cycle of the Federal Reserve, which heightens the liquidity of the dollarThese elements combine to accelerate traditional financial markets' recognition and enthusiasm towards Bitcoin and its counterpartsMoreover, Zhao Wei, a senior researcher at OKX Research Institute, echoed these sentiments, pointing out that expectations surrounding U.Smacroeconomic policies and an influx of capital from institutional investors, such as MicroStrategy, have fueled the recent surge.

Reaching the $100,000 threshold marks a pivotal moment for Bitcoin, yet available data suggests that its short-term trajectory still highly depends on market dynamics and news developments

Zhao Wei emphasized that while current trends show robust growth, the risks of significant price fluctuations remainFor investors, maintaining a vigilant eye on market variation and adapting trading strategies accordingly will be crucial.

In the broader landscape of cryptocurrency, Bitcoin's rising dominance is noteworthyAs the leading cryptocurrency, it has seen its market share increase during this upswing, impacting the overall sector's healthAltcoins like Ethereum and Dogecoin have also benefited from Bitcoin's ascension, demonstrating a general upward trend across the marketHowever, the influx of capital has predominantly favored Bitcoin, leading to a sharper increase in its value compared to other cryptocurrencies.

<p“At one point, Bitcoin's market share soared to 61%, marking its highest level since May 2021,” Zhao Wei commentedThis spike indicates growing trust and interest in Bitcoin as investors increasingly gravitate towards this flagship cryptocurrency

While altcoins are gaining traction, Bitcoin's status as an industry leader solidifies as new trends emerge in the cryptocurrency marketFor instance, the mainstreaming process is anticipated to accelerate, resulting in more institutional and retail investors entering the field, thus injecting new life into the crypto economy

Furthermore, the statistics indicate a substantial demand for stablecoins, with Tether (USDT) reportedly issuing approximately 9 billion new tokens, which reflects a dramatic rise in stability-seeking activities in the marketConsidering a more regulated environment, it is also anticipated that emerging cryptocurrencies will find new opportunities to expand their market share and attract additional trading audiences through technological advancements and broadened use cases.

On the subject of lesser-known cryptocurrencies, Wen Xiaoqi expressed caution regarding their investment merits, stating that while certain niche tokens have experienced price increases, their long-term potential remains questionable

Meme coins, while exhibiting speculative value in the short term, carry considerable risk over a longer horizonZhao Wei's assessment further highlighted that optimism in the market is partly fueled by expectations of potential regulatory relaxations from the U.Sgovernment, especially following supportive comments made by key officials and newly elected leaders, suggesting a growing openness towards the cryptocurrency sector.

Discussions surrounding the establishment of a dedicated U.Sgovernment position overseeing cryptocurrency policy also emerged recently, representing a potentially significant step for the legitimacy of the industryShould such measures be adopted, they could reduce regulatory uncertainties, bolster market confidence, attract traditional financial institution participation, and enable faster capital inflow.

Nonetheless, challenges remainThe potential loosening of regulations raises questions regarding risk management, requiring stakeholders to approach expectations rationally while closely monitoring the effective implementation of policies and their long-term implications for the crypto market.

In recent discussions, the idea of Bitcoin potentially being included as a U.S

reserve asset has stimulated significant debateHu Jie does not deem it necessary, citing that its importance is not as pronouncedQuestions arise regarding which entity would execute such an inclusionThe Federal Reserve, due to its central banking role, would have little rationale for engaging in Bitcoin transactions, while the Treasury's involvement would necessitate using budgetary resources to acquire Bitcoin, potentially disrupting other expenditure plans.

Historically, the Chinese government remains cautious about Bitcoin and other cryptocurrencies, categorically considering virtual currency-related activities as illegal financial practicesOnce a global leader in Bitcoin trading and mining, China saw its dominance wane following regulatory crackdowns, leading to the prohibition of crypto exchanges and mining operationsThe regulatory landscape shifted significantly, beginning with initiatives in 2017 when authorities prohibited public-private fundraising through token trading, which culminated in a strict ban on local trading within a year