Bitcoin has once again captured global attention, with its price recently surpassing $30,000 — a milestone that has left many retail investors stunned. For 95后 Xu Zhou, witnessing bitcoin trade at over 210,000 RMB per coin was nothing short of historic. But behind the headlines of astronomical gains lies a deeper, more cautionary tale — especially for young, inexperienced investors drawn to high-leverage trading in the volatile crypto market.
The Meteoric Rise of Bitcoin: From Obscurity to Mainstream
Over the past decade, bitcoin’s price has surged by more than 10 million times, transforming early adopters into overnight millionaires. What began as a niche digital experiment in 2009 has evolved into a globally recognized asset class, now rivaling traditional financial giants in market capitalization. At its peak, bitcoin’s total value even exceeded that of Berkshire Hathaway and Kweichow Moutai — two of the world’s most valuable companies.
This surge isn’t just driven by speculative frenzy. Structural macroeconomic forces are at play. As central banks around the world — particularly the U.S. Federal Reserve — unleashed unprecedented monetary stimulus in response to the pandemic, inflation expectations soared. In this environment, investors began seeking assets that could preserve value beyond traditional fiat currencies.
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Bitcoin, with its capped supply of 21 million coins, emerged as a digital alternative to gold — a "hard asset" immune to infinite printing. Unlike paper money or speculative bubbles like tulip mania, bitcoin's scarcity is algorithmically enforced, making it increasingly attractive during periods of monetary expansion.
Institutional Adoption: Fueling the Bull Run
One of the most significant developments behind bitcoin’s 2020–2025 rally is the growing involvement of institutional investors. No longer just the domain of tech-savvy individuals and underground traders, bitcoin is now being integrated into mainstream finance.
Major institutions such as MassMutual, PayPal, and DBS Bank have either purchased bitcoin directly or launched services enabling crypto transactions. According to data from Bitcoin Treasuries, publicly traded companies now hold over $6.9 billion worth of bitcoin on their balance sheets.
The Grayscale Bitcoin Trust played a pivotal role in opening institutional access. By allowing accredited investors to gain exposure to bitcoin through a regulated financial product, it created a one-way flow of capital into the asset. As inflation fears mounted and real interest rates turned negative, more fund managers viewed bitcoin not as a gamble, but as a hedge against currency devaluation.
However, regulatory skepticism remains. The U.S. Securities and Exchange Commission (SEC) has repeatedly rejected applications for a spot bitcoin ETF, citing concerns over market manipulation, liquidity, and investor protection. While futures-based ETFs have been approved, a fully transparent, exchange-traded vehicle backed by actual bitcoin holdings is still pending.
Why Bitcoin Is Not a Safe Haven Asset
Despite its growing acceptance, bitcoin is not a避险 asset — it does not behave like gold during market downturns. Instead, it remains highly correlated with risk-on sentiment in financial markets. During the March 2020 market crash, bitcoin plummeted nearly 50% alongside equities before recovering rapidly.
William, chief researcher at OKEx Institute, emphasizes: “Bitcoin belongs to the high-risk category of assets. Its price volatility makes it unsuitable for conservative portfolios.” Historical data supports this — since 2016, bitcoin has experienced ten drawdowns of 20% or more, seven drops exceeding 30%, and four crashes deeper than 48%.
These fluctuations underscore a critical truth: you can only earn returns commensurate with your understanding. As Xu Zhou reflects after selling his holdings at a profit: “I got out because I no longer understood the market. Everyone should invest within their circle of competence.”
The Dangers of Leverage for Young Retail Investors
While institutional money brings stability, the influx of retail traders — especially young investors using leverage — introduces new risks.
Hao Hu (a pseudonym), who entered the crypto space in 2016, recalls the early days of mining with homemade rigs and illegally tapped electricity in small-town China. He made his first profit quickly — a single mining rig paid for itself within a month. Encouraged, he converted his 0.5 BTC into various altcoins during the ICO boom.
Then came the crash.
After China banned ICOs in September 2016, most of those tokens lost over 80% of their value. Hao lost more than 50,000 RMB — a painful lesson that turned him into what many call a “crypto peasant” or “market韭菜.”
Now, when friends ask him how to get rich quick with bitcoin, he warns them: “Don’t expect to change your life through crypto. Be prepared to lose everything.”
Yet warnings rarely deter newcomers.
During bull runs, excitement spreads like wildfire on social media. Some young investors resort to using credit cards or personal loans to buy crypto. Others apply 10x to 30x leverage, magnifying both potential gains — and losses.
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William cautions: “Leverage trading is extremely dangerous in such a volatile market. A small price swing can trigger liquidation and wipe out an entire account.”
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Frequently Asked Questions (FAQ)
Q: Has bitcoin really increased 10 million times in 10 years?
A: While exact figures vary depending on entry point, early investors who bought bitcoin around $0.06 in 2010 saw gains exceeding 10 million percent by 2025 — effectively a 100,000x return or more.
Q: Is bitcoin a good hedge against inflation?
A: Many investors treat it as such due to its fixed supply. However, unlike gold, bitcoin lacks a long-term track record during sustained inflationary periods and remains highly volatile.
Q: Can I use leverage to trade bitcoin safely?
A: High leverage significantly increases risk. Given bitcoin’s frequent 10–20% daily swings, even 5x leverage can lead to total loss. It’s not recommended for inexperienced traders.
Q: Are banks really investing in bitcoin?
A: Yes — institutions like DBS Bank and MassMutual have allocated funds to bitcoin either directly or via financial products like the Grayscale Trust.
Q: Should young people invest in cryptocurrency?
A: Only with money they can afford to lose. Education and risk management are essential. Avoid leverage and never invest based on hype.
Q: Will the U.S. approve a bitcoin ETF?
A: While futures-based ETFs are approved, a spot bitcoin ETF faces regulatory hurdles. Approval may come eventually as oversight frameworks improve.
Final Thoughts: Stay Informed, Stay Cautious
Bitcoin’s rise reflects profound shifts in global finance — from monetary policy to digital ownership. But for young investors tempted by stories of overnight wealth, the message is clear: volatility is not opportunity.
The same technology that enables life-changing gains also carries the risk of total loss — especially when amplified by debt or leverage. As macroeconomic uncertainty persists, bitcoin may continue attracting institutional capital. But for individual investors, success will depend not on timing the market, but on understanding it.
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