By Beijing Business News reporter Liu Sihong
Bitcoin price continues to hit new highs. On December 5th Beijing time, the Bitcoin price continued to rise, breaking through $96,000, $97,000, $98,000, $99,000, and $100,000 in succession. As of 1:50 pm on December 5th, Bitcoin is still rising, with the latest price reported at $102,200, a 24-hour increase of 6.1%.
The surge in Bitcoin has also driven the rise of other virtual assets. The latest price of Ethereum is $3,832, up 4.67% in 24 hours and 6.06% in a week. The latest price of Dogecoin is $0.4364, up 4.98%, and the increase within one month has reached as high as 188.02%.
01 Behind the Frenzy
Since the beginning of this year, Bitcoin has accumulated an increase of 156%. Since November, Bitcoin has risen directly from $68,000 to $100,000 in just one month.
Source: Feixiaohao
What has driven the frenzy of Bitcoin? Yu Jianin, co-chairman of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, said that from the historical perspective of Bitcoin, its price changes can be summarized as "a three-level bull market". First, there is a speculative bull market led by retail investors, accompanied by curiosity about the technology and speculative investment sentiment, which has driven the price of Bitcoin to fluctuate and rise continuously in the early stage. Subsequently, the entry of institutional investors, especially the configuration of Bitcoin through financial products such as ETFs by asset management companies and financial institutions, has gradually transformed Bitcoin's status from a "speculative tool" to an investable asset, which constitutes the driving force for the second stage of the bull market.
This round of the rise in Bitcoin prices clearly marks the entry of the "three-level bull market" into the third stage, that is, the recognition and policy support at the national level, which has made Bitcoin a potential choice for global reserve assets, driving it into a new bull market stage.
On the news front, US President-elect Trump has chosen virtual asset advocate and veteran financial regulator Paul Atkins as chairman of the US Securities and Exchange Commission. After the announcement of this news, a number of virtual assets rose sharply in the short term.
In addition, not only the US, but market news also indicates that Russian President Putin has now publicly expressed support for virtual assets. Furthermore, Putin has formally signed an important law that clearly defines virtual assets as "property" and has developed a comprehensive tax framework for virtual asset trading and mining activities. This law will come into effect on January 1, 2025, marking a critical step for Russia in the regulation and taxation of virtual assets.
02 21,000 People Liquidated
Under the price surge, some speculators have suffered heavy losses. Coinglass data shows that in the last 24 hours, a total of 214,220 people were liquidated, with a total liquidation amount of $668 million, including both short and long positions.
Source: Coinglass
It needs to be reminded that in virtual asset trading, high leverage not only amplifies potential returns, but also significantly increases risks.
With the continued rise in Bitcoin prices, market sentiment has also heated up. So how much more room is there for Bitcoin to rise after breaking through $100,000? In this regard, Yu Jianin believes that from the current market fundamentals, Bitcoin still has considerable upside potential. The global macroeconomic environment, especially the uncertainty of geopolitics, coupled with the gradual decline in trust in the traditional fiat currency system, has prompted more and more institutions and countries to explore the option of including Bitcoin in asset allocation and foreign exchange reserves. This trend will bring in larger-scale capital inflows, providing a fundamental support for Bitcoin's further rise.
However, Yu Jianin also pointed out that after Bitcoin broke through the $100,000 milestone, it is difficult to accurately estimate the height of the peak. In a bull market, excessive speculation on the high point is not a rational strategy. What is truly important is to recognize the changes and development of the fundamentals that support its value.
Although the Bitcoin price has risen, the risks lurking behind it cannot be ignored. Yu Jianin pointed out that investors need to pay special attention to avoiding excessive risk-taking and emotional operations. Especially, high-leverage trading in the virtual asset market carries significant risks, as it may lead to severe losses in the event of violent price fluctuations, even resulting in a complete loss of capital in a short period of time. Therefore, investors should maintain a moderate risk exposure and avoid high-leverage operations to ensure that they are not forced to close their positions due to market volatility.
Secondly, the FOMO (Fear of Missing Out) sentiment often spreads in a bull market, leading investors to chase the rising prices at market highs, thereby facing a greater risk of price corrections. In the virtual asset market, blind following of the herd often leads to the dilemma of buying high and selling low. Maintaining rationality and making investment judgments based on fundamentals are particularly important. Investors need to be aware that each rise in a bull market is built on market volatility, and avoid chasing short-term price increases while ignoring long-term investment logic and risk management.
Well-known economist Pan Helin also pointed out that Bitcoin is a highly speculative asset, and its high volatility means that the price can also drop rapidly. Although the "hot potato" game is very attractive, it is not suitable for ordinary investors.
