Over the weekend, Bitcoin continued its decline. As of around 6:30 AM Beijing Time on February 1, Bitcoin had fallen below the $79,000 mark, trading at $78,130 per coin, reaching its lowest level since April 2025. Ethereum, Solana, Dogecoin, and others fell by over 10%. Data from CoinGlass shows that in the last 24 hours, more than 410,000 people globally were liquidated, with liquidation amounts reaching a staggering $2.529 billion (approximately RMB 175.8 billion). According to CoinGecko data, the sell-off over the past 24 hours wiped approximately $111 billion (about RMB 7.716 trillion) from the total market capitalization of the cryptocurrency market. Influenced by escalating geopolitical tensions and increased demand for safe-haven assets, global stock markets and cryptocurrencies experienced a synchronized decline. It is noteworthy that since the sharp sell-off in October last year, the cryptocurrency market has been shrouded in gloom, with the overall market sentiment remaining very weak. Institutional funds were once a core support for Bitcoin's price, but recent wavering in ETF flows has exposed the fragility of its underlying narrative. Wang Peng, Associate Researcher at the Beijing Academy of Social Sciences, stated that under the dual pressures of profit-taking demand and regulatory uncertainty, institutions are being forced to reduce their positions. The narrative of Bitcoin as a hedge against inflation is facing challenges; its price volatility far exceeds that of gold, and its high correlation with U.S. stocks makes it difficult to act as an independent risk hedge. For the future, Bitcoin needs to complete a narrative transformation from a speculative tool to a store of value, overcoming two major bottlenecks: regulatory compliance and technological trust. Divergent global regulatory policies could limit market expansion, and if blockchain security cannot withstand attacks, its foundational value will be shaken. Since its explosive 13,000% surge in 2017 brought it into the mainstream spotlight, Bitcoin has consistently cycled through dramatic booms and busts, plummeting nearly 75% the year after setting its record high. Jing Jianguo, an expert at the Shanghai Financial Services Association and Director of the Offshore Finance Research Institute at the Shanghai Chief Economist Financial Development Center, analyzed that cryptocurrency prices are extremely volatile and lack a stable value foundation. Taking Bitcoin as an example, between 2020 and 2021, its price soared from under $10,000 to nearly $70,000, only to subsequently experience a sharp decline. Such significant price fluctuations not only pose substantial risks for investors but also make cryptocurrencies unsuitable as reliable measures of value or mediums of exchange. Furthermore, the cryptocurrency market is characterized by intense speculative trading, with large amounts of capital flowing in for short-term gains, which can easily trigger market bubbles and pose a threat to financial stability. A sharp market correction could potentially trigger a chain reaction, impacting the entire financial system. A significant concern is that quantum computers could, in theory, break Bitcoin's encryption algorithms, reverse-engineering the private keys used to authorize transactions. Christopher Wood, Global Head of Equity Strategy at Jefferies, has completely removed Bitcoin from his investment portfolio, expressing concern that the rapid development of quantum computing could undermine Bitcoin's security. He liquidated the entire 10% Bitcoin allocation in his model portfolio, reallocating the funds to 5% physical gold and 5% gold mining stocks. In the long term, there are also optimistic voices in the market. Zhao Wei, Senior Researcher at the OKX Institute, stated that the fundamental basis for the Bitcoin market still exists. The trend towards global asset diversification, the steady increase of long-term capital, and growing institutional participation all lay the groundwork for Bitcoin's potential future appreciation.
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