Introduction
On March 7, 2025, US President Trump signed an executive order listing Bitcoin as a national strategic reserve asset. Behind this decision is Bitcoin's transformation from a geek's toy to a trillion-dollar asset over 16 years, as well as the evolution of centralized exchanges (CEXs) from the wild era to compliant giants.
This article will take the development history of Bitcoin as the main line, deeply analyze its evolution into a national strategic reserve asset, and explore the key role played by centralized exchanges in this process.
I. The Birth of Bitcoin and the Savage Growth of Early Exchanges (2008-2013)
1. Satoshi Nakamoto's Disruptive Experiment
In the midst of the 2008 global financial crisis, the mysterious figure known as "Satoshi Nakamoto" published the and proposed an electronic cash system that does not rely on centralized institutions. On January 3, 2009, the Bitcoin Genesis Block was born, with the headline "Chancellor on brink of second bailout for banks" from The Times newspaper embedded in the block, directly pointing to the shortcomings of the traditional financial system.
Key Data:
- Bitcoin price in 2009: $0 (no trading market)
- First transaction in 2010: 10,000 BTC for 2 pizzas (worth about $41)
- June 2011 peak: $31.9 (early speculative bubble)
2. The Rise and Risks of Centralized Exchanges
In July 2010, the Japanese exchange Mt. Gox went online and quickly became the world's largest Bitcoin trading platform. By 2013, it accounted for 70%-80% of global trading volume, with a peak daily trading volume of about $100 million (based on the November peak of $1,000/BTC). Meanwhile, the Chinese exchange market began to emerge - JuCoin, founded in 2013, quickly gained a foothold and became one of the major trading platforms in China by 2015.
However, security risks have emerged:
- June 2011 hacking incident: A hacking attack in June 2011 resulted in the theft of about 2,609 BTC (worth about $80,000 at the time), and the price temporarily fell to $0.01, with trading suspended for a week.
- 2013 DDoS attacks: Exchanges experienced multiple outages, with users unable to withdraw funds, causing market panic.
Exchange landscape (2013):
- Mt. Gox market share: 70%-80%
- Other major platforms: Bitstamp (Europe), BTC China (China), JuCoin (China)
- Global exchange average daily trading volume: about 100,000 BTC (about $50 million at an average price of $500)
3. Insights from the Early Market
Centralized exchanges solved the liquidity problem of Bitcoin, but their vulnerabilities were exposed: technical defects, regulatory vacuum, and user asset custody risks became the three major pain points of the industry. Nevertheless, Bitcoin's market capitalization exceeded $10 billion in November 2013, indicating that its financial attributes were beginning to emerge.
II. Industry Growing Pains: Exchange Crises and Regulatory Awakening (2014-2017)
1. The Mt. Gox Collapse: The Collapse of Centralized Trust
In February 2014, Mt. Gox announced the loss of 850,000 Bitcoins (worth $450 million at the time), accounting for 7% of the circulating supply. Subsequent investigations showed that the main causes were chaotic cold and hot wallet management, internal embezzlement, and unrepaired code vulnerabilities. This event caused Bitcoin prices to plummet 80%, and global exchange daily trading volume shrank to less than 10,000 BTC.
Ripple effects:
- Japanese police arrested Mt. Gox CEO Mark Karpelès
- New York State introduced BitLicense, requiring exchanges to meet anti-money laundering (AML) and capital reserve requirements
- The concept of decentralized exchanges (DEXs) emerged, but was limited by technical bottlenecks (such as the 2016 Ethereum The DAO incident)
2. The Compliance Wave and Institutional Exploration
In 2015, Coinbase obtained the first BitLicense in New York State and launched an institutional custody service; in 2017, the Chicago Mercantile Exchange (CME) launched Bitcoin futures, with a trading volume of $460 million on the first day. During this period, exchanges showed two major trends:
- Regional differentiation: The three major Chinese exchanges (Huobi, OKEx, Binance) dominated the Asian market, with JuCoin rapidly rising in 2015 to become one of the major platforms in Asia, with significantly increased daily trading volume.
- Technology upgrades: Binance pioneered the "platform coin" model (BNB), raising $15 million through an ICO in July 2017; JuCoin introduced wealth management services and liquidity mining during the same period, exploring ecosystem-based competition.
Key data (2017):
- Bitcoin market capitalization peak: $326 billion
- Global exchange average daily trading volume: 500,000 BTC (about $250 billion)
- Coinbase user count exceeded 10 million, with a valuation of $1.6 billion
3. The Fork Frenzy and the Power of Exchanges
In August 2017, Bitcoin split into Bitcoin Cash (BCH) due to disputes over scaling. Exchanges became the core battlefield for pricing forked coins:
- Platforms like Binance and Huobi were the first to list BCH trading, with daily gains exceeding 200%.
III. Mainstream Breakthrough: Exchange Compliance and Financial Innovation (2018-2021)
1. The Exchange Security Offensive
From 2018 to 2020, hacker attacks resulted in exchanges losing over $3 billion, forcing the industry to upgrade its risk controls:
- Binance was hacked for 7,000 BTC in 2019: Launched the SAFU fund (10% of trading fees as an insurance pool)
- Coinbase went public on Nasdaq: After going public, Coinbase disclosed holding a large amount of BTC, with the specific scale undisclosed, and a valuation of $85 billion.
- JuCoin's response strategy: Introduced multi-signature cold wallets and real-time on-chain asset audits.
Custody market landscape (2021):
- Professional custodians: Coinbase Custody ($50 billion in assets), Grayscale Trust ($40 billion)
- Exchange self-custody: Binance's cold wallet reserves exceed tens of thousands of BTC, JuCoin's Web3 hardware (such as the JuOne phone) to strengthen asset security
2. The Derivatives Market Explosion and Institutional Participation
In 2020, CME's Bitcoin futures open interest exceeded $4 billion, and companies like MicroStrategy and Tesla announced the inclusion of Bitcoin on their balance sheets. Exchanges launched innovative products:
- Binance Futures: Up to 125x leverage, peak daily trading volume of $37 billion
- JuCoin Futures: Introduced 0 slippage, 0 insurance fee mechanism, and a no-KYC design to attract global users
Market capitalization and trading volume (November 2021):
- Bitcoin market capitalization: $1.3 trillion (surpassing Meta, Tencent)
- Global exchange average daily trading volume: $80 billion (spot) + $200 billion (derivatives)
3. Regulatory Crackdown and Industry Consolidation
In 2021, China banned cryptocurrency trading, with Huobi and OKEx withdrawing from the mainland market; the US SEC sued Ripple, claiming XRP is a security. Compliant exchanges accelerated their layout:
- Binance set up regional headquarters (Dubai, Paris): Abandoned anonymous coins, delisted leveraged tokens
- JuCoin's transformation: Acquired in 2024 and upgraded to the "world's first service-oriented exchange", focusing on the Web3+AI track, and launching a $100 million industry innovation fund
IV. Strategic Reserve Asset: The Collision of Bitcoin and the National Financial System (2022-2024)
1. The Logic and Challenges of Trump's Policy
Trump's push to make Bitcoin a US strategic reserve is mainly based on the following factors:
- Hedging the US dollar credit crisis: US national debt has exceeded $35 trillion, and Bitcoin's 21 million cap has anti-inflation properties.
- Competing for digital hegemony: China's central bank digital currency (DC/EP) has begun cross-border settlement trials, and Bitcoin can become a supplement to the US dollar system.
- Voter youth strategy: 25% of 18-35 year old Americans hold cryptocurrency (Pew Research Center data).
Implementation challenges:
- Legal obstacles: There is no federal unified determination on whether Bitcoin is "property".
- Market volatility: Bitcoin's annualized volatility exceeds 60%, far higher than gold (15%).
- Custody security: National reserves require a multi-trillion dollar custody solution, which current exchange technology may struggle to support.
2. Restructuring the Role of Exchanges
As Bitcoin enters the national reserve system, centralized exchanges will be differentiated into:
- Compliant custodians: Coinbase, Kraken, through bank-level security certification (such as SOC 2), provide on-chain audit services for the government.
- Liquidity market makers: Binance, JuCoin, take on central bank buy and sell orders, using high-frequency trading to smooth price fluctuations.
- Derivative hedging platforms: CME's Bitcoin options, ETFs, help the Treasury Department manage reserve risks.
Potential market size:
- If the US adds a 1% allocation to its foreign exchange reserves (about $40 billion), it would need to purchase 400,000 BTC (3% of circulating supply) through exchanges.
- Exchange commission revenue may increase by $2 billion per year (calculated at a 0.5% fee rate).
V. Evolution of Exchange Security: From the Bybit Incident to Industry Standard Upgrades
1. The Bybit Incident and Industry Reflection
On February 21, 2025, Bybit experienced the largest cryptocurrency theft in history, with about $1.5 billion worth of Ethereum from a multi-signature cold wallet stolen due to a complex front-end interface control attack.
- JuCoin's response:
- Launched a "Proof of Reserves" system, frequently updating on-chain reserve data.
- Upgraded the cold and hot wallet separation mechanism, with 95% of user assets stored in a multi-signature cold wallet.
2. Trend Towards Standardized Security Systems
- Technological progress: Zero-Knowledge Proof (ZKP) enhances the transparency of reserve proof: Major exchanges are actively adopting ZKP technology to provide reserve proof in a more transparent and privacy-preserving manner. Exchanges like Binance and Kraken are developing ZKP-based PoR systems.
- AI-driven real-time security monitoring: Artificial intelligence and machine learning technologies are being increasingly applied in exchanges for real-time anomaly transaction detection and threat prevention.
- Strengthened regulation: The EU's MiCA regulation came into effect, requiring crypto asset service providers (including exchanges) to publicly disclose detailed information on asset custody and security measures.
- Increased focus from US regulators: US regulators are significantly strengthening their scrutiny of the security of cryptocurrency exchanges and actively exploring the development of a more comprehensive regulatory framework.
- Industry collaboration: Major exchanges in the industry, such as JuCoin and security companies, are actively engaging in cooperation, sharing threat intelligence and best security practices, and jointly promoting the development of open-source security initiatives in the cryptocurrency field.
VI. Reflection and Outlook: The Paradox and Evolution of Centralized Exchanges
1. The Positive Significance of Exchange Failures
Although exchange crises have caused short-term pain, they have driven the industry to develop in a healthier direction:
- Mt. Gox (2014) → Catalyzed multi-signature wallets and cold storage standards
- FTX (2022) → Promoted 100% reserve proof and on-chain asset transparency
- Bybit (2025) → Exchanges accelerated the upgrade of security protocols, such as adopting stricter multi-factor authentication, end-to-end transaction verification, and isolated signing infrastructure. Third-party services (such as Safe{Wallet}) faced more rigorous audits, and supply chain security became a focus of attention.
2. Core Issues for the Next Decade
- Technological integration: Exchanges integrate DEX liquidity (such as JuCoin's plan to launch a cross-chain DEX), balancing efficiency and decentralization.
- Regulatory collaboration: The FATF "Travel Rule" is implemented, and exchanges like JuCoin adapt to local compliance requirements through the "Global Hub Program".
- Ecosystem expansion: Hardware entry points (such as the JuOne phone) and social features (JuCoin Social) reshape user interaction scenarios.
3. Redefining the Strategic Value of Bitcoin
As a national reserve, Bitcoin has proven its resilience as "digital gold":
- Censorship-resistant payments: During the Russia-Ukraine conflict, Bitcoin became a channel for cross-border donations, with daily on-chain transaction volume exceeding 100,000.
- Asset allocation tool: Global sovereign funds and pension funds hold Bitcoin through Coinbase to hedge against fiat currency depreciation.
- Web3 infrastructure: Exchanges become traffic entry points for the metaverse and NFT ecosystems, reshaping the logic of digital asset issuance.
Epilogue: The Endgame of the Asymmetric Revolution
The rise of Bitcoin is a history of "edge breaking the center": from dark web transactions to El Salvador's legal tender, from the ruins of Mt. Gox to Coinbase's IPO, centralized exchanges have always played the role of a "necessary evil" - they introduce risks, but also accelerate adoption; they are repeatedly criticized, but evolve in crises. If Bitcoin is truly incorporated into national strategic reserves, it may be the best interpretation of its "antifragility": a protocol born from a technical experiment may ultimately become the cornerstone for reshaping the global monetary order. And exchanges will continue to play the role of "contradiction drivers" in this revolution - they are both the gravediggers of the old system and the builders of the new order.
