Bitcoin has been a transformative force in the world of finance, technology, and digital innovation. As someone who has followed its journey closely since 2012—when it was trading at just 40 RMB—I’ve watched not only its price evolve but also the global mindset shift around what money can be. This is my third commentary on Bitcoin, written now as the price hovers around 18,000 RMB. Previous pieces were penned in early 2013 (at 600 RMB) and late 2013 (6,000 RMB). Over the years, I’ve maintained a small holding of 1–2 BTC and even expanded into Ethereum in early 2016 while preparing a presentation on blockchain technology—back when Ether was still largely under the radar.
But beyond ownership and observation, one question continues to shape my perspective: Where does Bitcoin derive its value—and more importantly, where does my confidence in it come from?
The Real Driver Behind Price Movements: Confidence
In recent months, Bitcoin’s price has surged from around 10,000 to 20,000 RMB. While some point to technical developments like SegWit (Segregated Witness), geopolitical concerns such as capital controls, or even high-profile ransomware incidents like WannaCry, I believe the most accurate explanation lies in a single concept: confidence.
Price increases happen because more people are buying—and they’re buying because their belief in Bitcoin’s future is growing. That confidence doesn’t emerge in a vacuum. It builds through exposure: seeing consistent price appreciation, understanding Bitcoin’s potential as a revolutionary technology, and perhaps most powerfully, observing others placing their trust in it.
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This creates a self-reinforcing cycle. When you see friends, colleagues, or online communities investing in Bitcoin without regret, it reduces perceived risk. You begin to think: If so many people believe in this, maybe it won’t collapse tomorrow. That shared trust becomes a foundation for broader adoption.
Bitcoin and the Nature of Money
Once you accept that confidence drives value, Bitcoin starts to make far more sense—not as a speculative bubble, but as a new form of money shaped by collective belief.
Consider fiat currencies like the Chinese yuan or US dollar. At their core, they’re not backed by gold or physical commodities anymore. They’re supported by trust—trust in government institutions, central banks, and economic stability. The reason everyone accepts RMB is not because it has intrinsic worth, but because everyone else does. That network effect is powerful.
The same principle applies to Bitcoin. Its value isn’t derived from scarcity alone (though limited supply helps), nor purely from utility (though its use cases grow), but from the growing consensus that it will continue to hold value over time.
Of course, unlike national currencies with trillions in market capitalization and institutional infrastructure, Bitcoin’s total market cap—even at 18,000 RMB—is still tiny, roughly one-thousandth that of the RMB. This small size makes it inherently more volatile. Smaller markets react faster and more dramatically to shifts in sentiment.
But there’s another factor: speed of information and action. Bitcoin trades 24/7 across global exchanges. News spreads instantly. If a major regulatory update drops or a large institution announces support, traders can act within seconds. There's no waiting for bank transfers or currency conversion approvals.
In contrast, traditional forex markets are slowed by intermediaries, regulations, and settlement delays. These act as dampeners on volatility—but also mean exchange rates may lag behind true public sentiment. If a fiat currency had Bitcoin’s market size and open trading access, I doubt its price would be significantly more stable.
Why This Experiment Matters
Bitcoin represents one of the most fascinating socioeconomic experiments of our time: Can a decentralized, non-governmental, internet-native currency gain widespread legitimacy?
I’m confident the answer is yes—and we're already seeing it unfold.
Since I first learned about Bitcoin in 2012, I’ve seen it go from obscure tech curiosity to mainstream financial asset. It has inspired thousands of alternative cryptocurrencies, sparked global interest in blockchain technology, and accelerated advancements in computing hardware—from GPUs to ASIC miners.
These ripple effects highlight something crucial: Bitcoin’s impact extends far beyond price charts. It has redefined how we think about ownership, privacy, financial inclusion, and trustless systems.
Even my own brief foray into Ethereum wasn’t just about investment—it was about exploring what becomes possible when decentralized networks enable programmable money. That journey started with Bitcoin.
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Frequently Asked Questions
Q: Is Bitcoin’s value based solely on speculation?
A: While speculation plays a role, especially in the short term, Bitcoin’s long-term value stems from its scarcity (capped at 21 million coins), security model (proof-of-work), decentralization, and increasing adoption as a store of value—similar to digital gold.
Q: How can something with no physical form have real value?
A: Modern money is increasingly digital. Even fiat currencies exist mostly as electronic records. Value comes from trust and utility. Bitcoin offers censorship-resistant, borderless transactions and protection against inflation—features that give it functional and strategic worth.
Q: Isn’t Bitcoin too volatile to be used as real money?
A: Today, yes—its price fluctuations make it better suited as a store of value rather than daily spending. But volatility tends to decrease as markets mature and liquidity grows. Early internet stocks were volatile too; that didn’t negate their long-term significance.
Q: What if governments ban Bitcoin?
A: Some countries may restrict or regulate it heavily, but banning a decentralized network globally is nearly impossible. Like the internet, Bitcoin operates across borders and nodes worldwide. Regulation often leads to clearer frameworks that boost institutional confidence.
Q: How do I start building confidence in Bitcoin myself?
A: Start by learning—read the whitepaper, understand how wallets and private keys work, follow trusted voices in the space. Then consider starting small: buy a fraction of a coin, hold it securely, and observe how the ecosystem evolves over time.
Final Thoughts: A Living Experiment
Bitcoin is not finished evolving. Neither is our understanding of it. What began as an obscure cryptographic experiment is now influencing central bank policies, inspiring new financial products, and challenging old assumptions about control and trust.
My confidence comes not from blind faith, but from witnessing over a decade of resilience—from market crashes to regulatory scrutiny to technological breakthroughs—and seeing continued innovation and adoption emerge stronger each time.
We are still early. The experiment continues. And every transaction, every new user, every line of code contributes to answering the ultimate question: Can we build a global financial system rooted in transparency, openness, and shared belief?
The fact that millions are already saying “yes” is reason enough to keep believing.
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