From 'scam' to $100,000, uncovering the story behind Bitcoin! (Twenty-thousand-word article)

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Bitcoin (BTC), from an unknown experiment in 2009 to a price exceeding $100,000 in 2024, has become a legend in the field of global digital assets. Its birth stemmed from the exploration of decentralized finance, and over 17 years of development, Bitcoin has experienced technological breakthroughs, market fluctuations, and regulatory tests, gradually growing from a 'geek toy' to a synonym for digital gold.
Reflecting on this journey, from buying two pizzas with 10,000 bitcoins to becoming a mainstream investment asset, every step of Bitcoin has been accompanied by doubts and brilliance, ultimately standing at the peak of modern finance.
January 26, 2026, marks the 17th anniversary of Satoshi Nakamoto's publication of the Bitcoin white paper (Bitcoin: A Peer-to-Peer Electronic Cash System) on the P2P Foundation website. The Bitcoin network officially launched on January 3, 2009, with an initial trading price of $0.0008.
According to market data as of January 26, 2026, the current price of Bitcoin is $87,838, with a total market capitalization of $1.76 trillion. Since its inception, Bitcoin has appreciated more than ten million times. Let's return to the starting point of cryptography and commemorate the release of the Bitcoin white paper.

The beginning of everything
In November 2008, a paper authored by Satoshi Nakamoto was published online, titled "Bitcoin: A Peer-to-Peer Electronic Cash System." The paper detailed how to use peer-to-peer networks to create a "trustless electronic transaction system."

Satoshi Nakamoto created Bitcoin against the backdrop of its initial purpose. On September 15, 2008, the financial crisis, beginning with the collapse of Lehman Brothers, erupted in the United States and quickly spread throughout the world.
Following Lehman Brothers' bankruptcy, the U.S. Treasury launched an unprecedented large-scale bailout to address the crisis, sparing no expense in using staggering amounts of public funds to rescue Fannie Mae and Freddie Mac, the two largest mortgage lenders. Simultaneously, the Federal Reserve implemented quantitative easing, massively injecting liquidity in an attempt to stimulate the U.S. economy through excessive money printing. Not only the U.S. but the entire world suffered. The value of dollars held by various countries plummeted, triggering a series of ripple effects such as increased exchange rate volatility and a stock market crash; the global economy was instantly mired in a deep recession.

Satoshi Nakamoto created Bitcoin out of dissatisfaction with the current monetary system and a desire to protect privacy. In the traditional monetary system, all currencies are issued by central banks, and transactions are recorded and confirmed by banks. Bitcoin breaks this traditional model, enabling peer-to-peer transactions between individuals without the intermediaries of banks or other financial institutions. Because the supply of Bitcoin is limited to 21 million coins, it will not inflate over time like traditional currencies, thus protecting its value from inflation.
1982-2008: The Origins of CryptocurrencyEven before Bitcoin was invented, the world's leading cryptographers had already begun exploring the potential of digital currencies.
David Chaum of UC Berkeley is an industry pioneer. In the 1990s, he launched a digital currency called "eCash" through his company DigiCash. Although DigiCash declared bankruptcy in 1998 due to funding problems, its attempt had a positive impact on the evolution of cryptocurrencies and inspired many developers.
Image source: CriptoNoticias
Just as traditional financial markets were in chaos, Bitcoin gained the attention of cryptography enthusiasts. After two months of development, Satoshi Nakamoto officially launched the Bitcoin system on January 3, 2009.
After the Bitcoin network went live, the first open-source Bitcoin client software was released. Satoshi Nakamoto used this software to "mine" the first Bitcoin "block" (also known as the genesis block) and earned the first 50 bitcoins. Initially, the value of Bitcoin transactions was negotiated among users on the "bitcointalk" forum, including exchanging 10,000 bitcoins for a whole pizza.

Whenever Bitcoin enters the mainstream media's field of vision, the media invariably invites mainstream economists to analyze it. Initially, these analyses focused on whether Bitcoin was a scam. Now, the focus is on whether Bitcoin can become a mainstream currency in the future. And the crux of the debate often centers on Bitcoin's deflationary characteristics.
The Bitcoin network generates new Bitcoins through "mining." Mining essentially involves using computers to solve a complex mathematical problem to ensure the consistency of the Bitcoin network's distributed ledger system. The Bitcoin network automatically adjusts the difficulty of the mathematical problem, ensuring that the entire network obtains a valid solution approximately every 10 minutes. The network then generates a certain amount of new Bitcoins as a block reward, which is given to the person who finds the correct solution.
Many Bitcoin enthusiasts are attracted by the fact that Bitcoin cannot be arbitrarily increased in supply. In stark contrast to Bitcoin enthusiasts, economists are polarized in their opinions regarding Bitcoin's fixed total supply of 21 million.

Keynesian economists believe that governments should actively regulate the money supply, using monetary policy to appropriately stimulate or restrain the economy. Therefore, they argue that Bitcoin's fixed money supply sacrifices controllability and, worse, inevitably leads to deflation, thus harming the overall economy. Austrian economists, however, hold a completely opposite view. They believe that less government intervention in the money supply is better, and that deflation caused by a fixed money supply is not a major problem, but rather a sign of social progress.
Silk Road
Compared to Bitcoin's current glory, its birth is insignificant.
On January 3, 2009, Satoshi Nakamoto created the first block—the genesis block of Bitcoin—on a small server in Helsinki, Finland, and received the first reward of 50 bitcoins automatically generated by the system. The first bitcoin was thus born.

For a long time afterward, the world ignored this new invention—what was its purpose? Satoshi Nakamoto, a recognized genius, did not answer. In December 2010, Nakamoto left his last message online and never appeared again.
For the first year or two after its inception, Bitcoin remained at $0.10 per coin. The famous story of exchanging 10,000 Bitcoins for a pizza occurred during this period. Bitcoin possesses a brilliant design, yet it is a useless one.
Satoshi Nakamoto, like Shakespeare, wrote a perfect play, but no one could perform it. Until Bitcoin met another "genius".
Ross Ulbricht, born in 1984, began his drug trafficking career in college. Due to strict U.S. government regulations on drugs, Ross was unable to scale up his drug manufacturing and trafficking operations. A turning point came in 2010 when Ross heard about Bitcoin from a client.

Ross Ulbricht

The government's crackdown on illegal activities focuses on the regulation of funds—and at the heart of this is the banking system, which is firmly controlled by the government. Bitcoin, on the other hand, is a payment tool that operates outside the banking system—and even now, banks and Bitcoin remain separate entities.
In January 2011, Ross, then only 26 years old, founded a "deep web," commonly known as the dark web. Ross named the website Silk Road, meaning a place for the exchange of goods.
"Silk Road" did not trade tea, silk, or porcelain; it was the most famous and notorious "dark web" in history. The site's main transactions involved drugs, sex slavery, child pornography, hitmen, arms dealing, and identity fraud.

All illegal transactions converged on "Silk Road." In the end, even Ross himself became deeply involved. He once hired a hitman with a large deposit to kill a Canadian user who had hacked into a seller's computer and was extorting and threatening him.
With the rise of the Silk Road, Bitcoin finally found its first use case—a payment tool for illicit transactions. Data shows that over 9.5 million Bitcoins circulated along the Silk Road, accounting for 80% of the total Bitcoin supply at the time.

Screenshot of the Silk Road website
In August 2013, Ross was arrested at a public library in San Francisco. In 2015, he was sentenced to life imprisonment without the possibility of early parole.
The demand for black is still demand. Just like the consensus of fools is still consensus. Driven by criminal transactions, Bitcoin experienced its first surge, reaching $31 in June 2011. And two months after Ross's arrest, Bitcoin rose to $1,100 per coin.

In conclusion, Ross Ulbricht was an extremely important figure in the history of Bitcoin. Just when Bitcoin was about to be ignored by the world, he ended its history as a toy, giving it real-world significance—serving criminals.
"Criminals are the most receptive to new technologies," summarized Xu Zhihong, a partner at CoinU. However, in the long struggle, police departments mastered the technology to trace Bitcoin. More illicit transactions shifted to more difficult-to-track cryptocurrencies like Monero. Bitcoin embarked on a long bear market that lasted for several years.
Block Size WarFast forward to 2015.
On August 15th of that year, two early Bitcoin technology pioneers, Gavin Andresen and Mike Hearn, jointly announced in a blog post that their new version of BitcoinXT would implement the BIP-101 proposal, which would be activated directly without requiring miners' votes.
This day later became known as the "Block Size Wars Day".

Since Bitcoin's inception in 2009, the Bitcoin community has been divided on several key issues. Among these, the debate surrounding the Bitcoin block size has been the most intense. This controversy originated from Bitcoin's original design principles. The enigmatic founder, Satoshi Nakamoto, set a limit of 1 megabyte per block to prevent meaningless transactions and data bloat. However, with Bitcoin's widespread adoption, this limit began to prove insufficient, leading to network congestion and increased confirmation times. In fact, as early as 2013, core developer Jeff Garzik proposed doubling the block size to 2 megabytes, sparking initial discussions within the Bitcoin community regarding block size.
In 2015, the controversy escalated further. Developers who supported increasing the block size launched the Bitcoin XT project, attempting to directly increase the block size to 8 megabytes.

On one hand, Gavin Andresen and Mike Hearn, two original developers who had extensive communication with Satoshi Nakamoto, favored increasing the block size to 8 megabytes as a strategy to cope with the increase in transaction volume. On the other hand, core developers such as Greg Maxell, Luke-Jr, and Pieter Wuille warned that over-expansion could lead to fewer nodes being able to run full nodes, reducing Bitcoin's decentralization. They even suggested that a hard fork could cause network chaos and fragmentation, and that endlessly pursuing larger blocks was not the best solution for scalability.
Meanwhile, 2015 also witnessed the birth of Ethereum. Its founder, Vitalik Butarin, although a staunch supporter of large blocks, focused his ideas on the Ethereum blockchain. He believed that the scalability of the chain should be limitless, that all smart contracts and data should be included on the chain, and that it should provide larger blocks and lower transaction fees.

This controversy subsequently escalated into a serious split within the Bitcoin community. The two sides engaged in numerous heated discussions surrounding block size, but failed to reach a consensus. What began as a debate about how the network should scale to handle increasing transaction volume later devolved into a philosophical debate about Bitcoin's ultimate purpose and a "political drama" about how to manage this open-source project.
In 2017, developers supporting larger blocks initiated a hard fork of Bitcoin Cash, increasing the block size to 8 megabytes. This led to a formal split in the Bitcoin community, with supporters of smaller blocks maintaining the existing Bitcoin blockchain, while those supporting larger blocks created the new Bitcoin Cash blockchain. This resulted in the first and largest fork in blockchain history due to the Bitcoin block size controversy.
After the fork, the two chains developed independently, and the block size debate continued. Bitcoin maintained its 1-megabyte block size, while Bitcoin Cash further increased its block size to 32 megabytes in 2018. Ultimately, the smaller block size camp won the block size war. However, winning one battle did not mean the war was over forever, as new BIPs (Block Instructions) are constantly being proposed, and many debates still exist between the "small block camp" and the "large block camp."
45 Bitcoin forks
The Bitcoin community has put forward hundreds of proposals to solve this problem. The debates among these competing proposals are extremely fierce. Often, as soon as one person puts forward their idea, they will be refuted mercilessly by another opponent. It is like a war on the Internet. At times, it seems to have deviated from the original intention of solving the problem. The debate has escalated and even led to death threats and hacking attacks.
Amid the chaos, two solutions gradually emerged, evolving into two camps. One camp, led by Bitmain and comprised of miners, proposed a larger block size solution to directly increase the Bitcoin network's capacity. The other camp, led by Bitcoin Core developers, did not support Bitmain's ideas. They advocated maintaining the Bitcoin network at 1MB and instead introducing a second-layer network outside the Bitcoin network, namely Segregated Witness and Lightning Network.
Fork in the road

In 2017, Bitcoin reached a peak price of $20,000 per coin. Amidst this frenzied surge, a Bitcoin enthusiast made a phone call to his closest friend. The 31-year-old pleaded with his friend on the other end of the line, "What's wrong with helping me just this once?"
The person who answered the phone was Chang Jia, the founder of Babbitt, China's largest blockchain forum and media outlet. He plays a pivotal role in the Chinese blockchain world, and Babbitt also has a huge influence in the Chinese crypto world.
The man who called for help was Wu Jihan.
Wu Jihan once worked alongside Chang Jia to co-found Babbitt. Now, he is one of the founders of Bitmain, the world's largest cryptocurrency mining machine manufacturer. In Hurun's list of the wealthiest people born in the 1980s, the 32-year-old Wu Jihan was ranked among the top 50 self-made entrepreneurs born in the 1980s with assets of 16.5 billion RMB.

At the time, Wu Jihan's Bitmain controlled more than 60% of the Bitcoin network's computing power and was considered "the only person who had the opportunity to destroy and control Bitcoin."
Making the decision to make that call might not have been easy for Wu Jihan; he wasn't one to back down easily. But he needed more support to hard fork Bitcoin. On the phone, he awaited Chang Jia's reply, hoping his former friend and comrade-in-arms would support him.
Forking is a common upgrade and update in the open-source software field. In blockchain, soft forks are usually compatible with both the old and new versions, while hard forks are not. A hard fork of Bitcoin means that Bitcoin will be split into two incompatible versions.
"I can agree to anything else, but not this one." Chang Jia flatly refused his request. Wu Jihan probably hadn't expected Chang Jia to reject him like this. After all, he had helped Chang Jia when Babbitt was in its most difficult time, and he probably hoped that Chang Jia could help him out of consideration for their past relationship.
Ultimately, Longsword and his Babbitt remained neutral in this epic battle of the forks.
Rewind to February 20th, a year before the fork, at Cyberport in Hong Kong. The atmosphere at the meeting was tense. Representatives of Bitcoin miners from China and the Bitcoin development community from the United States engaged in 18 hours of heated debate in a small conference room. Everyone was exhausted but excited. They didn't know what impact the conclusions reached in this room would have on the crypto world in the future, but they knew that this was the first time Bitcoin had faced a true "fork" since its inception.
At 3:30 AM on February 21st, the debate in the meeting room ended, replaced by a moment of silence. The tense delegates finally breathed a sigh of relief, as they reached a consensus on increasing the storage capacity of Bitcoin, a consensus also known as the Hong Kong Consensus.

"No more division!" the attendees cheered.
"If you were worried that Bitcoin would split into two coins and cause the price to crash, you can now rest assured that the dispute has been downgraded from a military struggle that could have led to the division of the country to a parliamentary struggle, which greatly reduces the danger."
With the Hong Kong consensus reached, many people in the Bitcoin industry finally breathed a sigh of relief and spread the news of this hard-won consensus.
Wu Jihan, who usually appears with a baby face, round glasses, jeans, and sneakers, finally showed a happy smile in the group photo after signing the Hong Kong Consensus agreement, a rare occurrence for him, despite his previously worried expression. The Hong Kong Consensus has excited the entire Bitcoin industry because the Bitcoin community had been embroiled in a three-year-long dispute and division over scaling, and this time they can finally put aside their differences and work together on development.
Because the participants in this consensus included Bitcoin core developers, the five major mining pools led by Bitmain (accounting for 80% of the Bitcoin network's hash power), representatives from the four major exchanges (BTCC, Bitfinex, OKCoin, and Huobi), and other individuals or industry representatives, the Hong Kong Consensus is also regarded as the most important official document in Bitcoin's history since the white paper.
In 2013, the Bitcoin network began to face a thorny problem: as the number of Bitcoin users grew, the block size designed by Satoshi Nakamoto became insufficient. Bitcoin transactions became increasingly slow, while transaction fees rose accordingly. This plunged the entire Bitcoin community into unprecedented anxiety; if this continued, Bitcoin would become as mundane as bank card transactions. People began to debate how to solve this problem.
Just a month before the Consensus Conference in Hong Kong, Bitcoin developer Mike Hearn announced his withdrawal from the Bitcoin industry, declaring it a "failure." This negative news caused the price of Bitcoin to plummet from $440 to $360.
Through the mediation of various parties, the Hong Kong consensus was reached. On the same day the Hong Kong consensus was reached, the price of Bitcoin also recovered to $440.
Following the Hong Kong Consensus meeting, Bitcoin Core claimed that all the developers who promised various changes at the meeting were programmers without permission to modify the Core source code. None of the five people authorized to modify the Core source code attended, nor did they sign the agreement.
Adam Back also stated that his signature at the meeting represented only his personal opinion and did not represent Bitcoin Core's agreement with the Hong Kong Consensus. His attitude underwent a complete 180-degree turn, and he strongly opposed the Hong Kong Consensus that he had recently signed.
The Hong Kong consensus has been rejected by Bitcoin Core.
This reversal directly provoked the miners, who account for 80% of the network's hashrate and support the Hong Kong consensus, plunging the Bitcoin community, which had just reached a consensus, back into continuous arguments and divisions. The miner faction, represented by Bitmain, described the Bitcoin Core developers as conservative Bitcoin fundamentalists, while the Bitcoin Core developers, in turn, disrespected the miners, viewing them as money-grubbing businessmen.
One day in March 2017, Jihan Wu tweeted, "I don't think the economic majority matters. I ignored the so-called majority when I started investing in Bitcoin in 2011." He decided to start afresh and stop playing with Bitcoin Core.


On May 23, 2017, Barry Silbert, founder of Digital Currency Group, a top cryptocurrency investment firm, convened a meeting in New York with representatives from 58 companies in 22 countries.
To convene this meeting, Barry Silbert engaged in one-on-one communication with key companies and developers in the industry, acting as a mediator. After much effort, Barry initially softened the positions of all parties. At that time, Adam Back also agreed to travel to New York in May for face-to-face consultations with Barry.
An unexpected event occurred: Adam Back, representing the Bitcoin Core faction, missed his deadline again.
Just before his departure, he was firmly stopped by another key partner within Blockstream. On the eve of the meeting in New York, he announced at the last minute that he would not attend the meeting and instead sent the lower-ranking Miao Yongquan to participate.
Miao Yongquan joined Blockstream in April 2017 as CSO. When he arrived representing Bitcoin Core and Blockstream, he was refused entry by Barry Silbert at the venue entrance. Given Miao's history of arguments with various people on Twitter, Barry Silbert worried that Miao's presence would cause unpleasantness for everyone.
As the defending party controlling the development of Bitcoin's code, Bitcoin Core can maintain the initiative and continue on its original path as long as it avoids mistakes. Meanwhile, Bitmain, as the aggressor advocating a hard fork, needs to persuade others to support the new path with incentives. After being shut out in New York, the Bitcoin Core faction proposed their own soft fork plan before Segregated Witness deployment. Although it ultimately failed to be implemented for various reasons, this action certainly provoked the miners.
Therefore, VbitSpeed, a mining farm invested in by Bitmain, launched a hard fork solution to counter the challenge of the Bitcoin Core soft fork. Finally, on August 1, 2017, the VbitSpeed ​​team mined the first block, and thus, BCH, the fork coin competing with BTC, was born. BCH has a capacity of 8M, which can accommodate more than eight times the transactions of BTC, and is incompatible with Segregated Witness.
On January 13, 2018, Bitcoin's market capitalization as a percentage of the entire cryptocurrency market fell to 32.45%, a record low. At the time, many people thought that Bitcoin's replacement was only a matter of time.
For Jihan Wu, computing power is his greatest advantage and weapon, and he hopes that his fork coin, BCH, can replace BTC. However, BTC holds the orthodoxy and naming rights to Bitcoin, as well as nine years of user accumulation and industry ecosystem. Since its inception, BCH has faced a severe challenge: no one recognizes it.
Coupled with opposition from the Bitcoin Core camp and the neutral stance of most industry companies, after the BTC fork, most BCH was sold off by users as airdrops, and the price of BCH was only around $200 when it first came out.

After the fork, Jihan Wu attracted miners to mine BCH by driving up its price, while simultaneously selling off BTC, causing instability in the BTC price. Ultimately, "many miners chose to continue mining BCH, leading to a decrease in Bitcoin's hashrate, increased network congestion, and a loss of confidence among more people who sold off their Bitcoin. In the end, miners migrated even more to BCH, creating a vicious cycle that led to the collapse of Bitcoin."
So Wu Jihan's first attack was a price pump. The price of BCH soared, reaching $898 on August 20th, less than twenty days after the fork, more than tripling in value. Miners saw the profitability of BCH, and with BTC's hashrate shrinking and trading becoming more congested, more and more people switched to BCH, further driving up its price. This cycle continued, with the price of BCH steadily increasing.
Then, Jihan Wu launched his second attack, seizing Bitcoin's hash power. In extreme cases, BCH diverted nearly half of BTC's hash power, causing significant congestion on the Bitcoin blockchain. However, in November, BCH's hash power reached twice that of BTC, while its price remained only one-third of Bitcoin's. Ultimately, BCH's hash power quickly collapsed and never surpassed Bitcoin's again.
For a long time, the price of BCH was artificially anchored at 7% to 10% of BTC.
In May 2018, the CoinGeek Hong Kong conference was held, with major mining pools, exchanges, and developers gathering in Hong Kong to celebrate BCH's first anniversary and commemorate its "exciting" development over the past year. Bitcoin.com founder R0ger Ver, LBTC mining pool founder Jiang Zhuoer, and BCH core developer Jiang Jiazhi posed for a photo at the event, representing public opinion, mining pools, and development respectively, to celebrate Bitcoin Cash's first anniversary.

During the entire bear market of 2018, Bitmain heavily invested in the Bitcoin Cash (BCH) sector, converting all of the company's Bitcoin and cash into BCH, resulting in significant losses. Since then, BCH has maintained a roughly 1:20 ratio with Bitcoin in both price and hashrate. This excessive BCH holding led to accusations that Bitmain relied on selling BCH to generate revenue during its Hong Kong listing in 2018.
Looking back two years after the Bitcoin fork, the BTC fork event has long since been resolved, and BCH has followed a parallel path. However, this fork has had a profound impact on the entire Bitcoin ecosystem.
The Miner's Story
If I told you today that Bitcoin had the opportunity to be controlled by the Chinese more than a decade ago, would you believe me?
One night in May 2010, a hungry programmer traded 10,000 Bitcoins for two pizzas worth $30 each, giving Bitcoin its first price—$0.003. This invisible and intangible protocol thus acquired real value, leading to a bull market filled with stories of instant wealth and the rise of cryptocurrency mining.
In its early days, Bitcoin had no value, and few people participated in the network. Mining only required a computer CPU. Hal Finney was one of the earliest miners. Within a week or two, he mined several thousand Bitcoins using his own computer. He eventually shut down the mining software because the CPU was overheating and the computer fan was making a lot of noise.
But this $0.003 transaction changed everything. Seeing that Bitcoin mining was profitable, more and more people joined the network. Soon, geeks began writing their own GPU mining programs and building specialized mining machines, which are what we now know as mining rigs.
Soon, this tech craze spread to domestic geek forums, sparking heated discussions among a small group of people. In 2011, Wu Jihan funded Changxia and established Babbitt, one of the earliest Bitcoin forums in China, where discussions about mining began. Zhang Nangeng, who was studying integrated circuit design at Beihang University, rose to fame for building an FPGA mining machine and was nicknamed "Pumpkin Zhang" by netizens. Additionally, there was Xigua Li, a software engineer from Guilin, who developed the wildly popular "Watermelon Mining Machine."
Just as GPUs were gaining popularity, a small American company called Butterfly Labs announced that it was developing an ASIC specifically designed for Bitcoin mining. This machine forgoes all other computer functions and is dedicated solely to the Bitcoin SHA-256 algorithm, achieving speeds far exceeding those of GPU miners.
Butterfly miner, image sourced from the internet.
After the concept of ASIC miners spread to China, people quickly took action. Besides Zhang Nangeng, nicknamed "Pumpkin Zhang," another legendary figure in the mining industry was Friedcat, Jiang Xinyu. Friedcat entered the University of Science and Technology of China at the age of 15 and later pursued a PhD in Computer Science at Yale. He was captivated by the concept of Bitcoin when he first heard about it, and returned to China to become a miner before finishing his studies, becoming the second person in China, after Zhang Nangeng, to develop an ASIC miner.
In August 2012, Friedcat established a company in Shenzhen and conducted an IPO on the internet, issuing 160,000 shares at a price of 0.1 Bitcoin per share, with the ticker symbol ASICMINER. Afterwards, he used the funds raised through crowdfunding to open a mining farm in Shenzhen, mining Bitcoin with his own mining machines, and it was rumored that he earned 200 million yuan in 3 months.
One of the few publicly available photos of Roasted Cat (left), image sourced from the internet.
Seventeen days after the release of Friedcat's ASIC prototype, Zhang Nangeng also assembled his own Avalon team and completed the delivery of his first mining machine, the Avalon 1. While Friedcat and Zhang Nangeng were rapidly developing, another competitor entered the market. In the first half of 2013, Wu Jihan founded Bitmain, launching three computing chips within just 13 months, forming a three-way competition with Friedcat and Zhang Nangeng. Later, Bitmain's Antminer S1 swept aside many competitors, making its mining machine distributors a fortune.
Both Friedcat and Zhang Nangeng were experiencing a shortage of mining machines and booming business, signaling the arrival of the Bitcoin ASIC mining era.

The immense wealth effect attracted countless entrepreneurs to the market, resulting in the production of all sorts of Bitcoin mining machines, including the popular Chipminer, the Little Strongminer, and the Silverfishminer. Manufacturers competed fiercely, leading to increasingly rapid iterations of mining machines, to the point where early pre-orders of mining machines became obsolete by the time they arrived. Eventually, manufacturers discovered that while their machines were still on the production line, their competitors' customers had already received machines with even better performance. Companies like Bitmain, which entered the market early, began deploying massive amounts of computing power, measured in petabytes (P). From this point onward, over 70% of Bitcoin's computing power was firmly established in China.
Meanwhile, led by geek miners, a large number of gold diggers flooded into China's Bitcoin market. Fueled by the "Chinese aunties" (a term referring to middle-aged and elderly women), the price of Bitcoin skyrocketed, breaking the 4,000 yuan mark and approaching 7,000 yuan within days. At the beginning of the year, Bitcoin was worth less than 80 yuan. In just a few months, approximately 10 billion yuan of capital was invested in the market, making China the world's most enthusiastic market for Bitcoin mining and trading.
In 13 years, Bitcoin has created one wealth myth after another, with Li Xiaolai being the most typical example. This former English teacher at New Oriental bought 100,000 Bitcoins in 2011 and has now become China's "Bitcoin Richest Man," having not only founded the Bitcoin Fund but also established Yunbi.com.
Old Cat is another example. Ten years ago, while on a business trip with his boss, Old Cat saw a report about Bitcoin in a newspaper at a newsstand, which changed the course of his life.
The Great Migration
Time quickly passed to 2021, and the miners' darkest hour arrived.
At midnight on June 20th, all Bitcoin mining farms in Sichuan were forced to shut down due to a directive. Previously, from Inner Mongolia and Qinghai to Xinjiang and Yunnan, domestic Bitcoin miners had been relocating their machines under pressure from policy documents, with Sichuan becoming the last remaining hub. However, the issuance of the shutdown order in Sichuan shattered the miners' hopes and signified that, theoretically, there would be no more mining farms in China. China's computing power, which once accounted for 75% of the entire Bitcoin network, will now completely disappear from the map.
After that unforgettable night, Chengdu, the capital of China's cryptocurrency mining industry, has no shortage of frustrated and confused miners.
On June 22, in a jazz bar on the top floor of a five-star hotel in Chengdu, groups of middle-aged men with somber expressions sat together, smoking and chatting. Their T-shirts were sparsely printed with cryptocurrency slogans such as "Bitcoin" and "To Da Moon." Their conversations were filled with keywords such as "mining machines," "going global," and "connecting with overseas resources." In the corridor outside the bar, a few people were scattered around, pacing back and forth while making phone calls to sell mining machines, smoking one cigarette after another.
On the same day, in another five-star hotel in Chengdu, the "Global Mining Resources Matching Conference" was held quietly. Miners from all over Sichuan, whose power had been cut off, came here to systematically learn about the overseas expansion process from the introductions of various companies, hoping to find their "Noah's Ark" to the other side of the ocean through mutual support and collective wisdom.
It's easy to see from the miners' state that the stalled Chinese Bitcoin mining industry has fallen into confusion and panic.
In Dujiangyan, 50 kilometers from Chengdu, the mighty Minjiang River surges down. During the Warring States period, Li Bing and his son saw the world-famous water conservancy project in the turbulent waters. Modern Bitcoin miners see the electricity resources on which their mining machines depend.
Old Wu's mine is located in the mountains of Dujiangyan, covering an area of ​​about 1,000 square meters. It relies on the impact of the water flow to maintain the day and night roar of tens of thousands of mining machines.

Bitcoin mining farms deep in the mountains, image courtesy of miners.
"When the policies to shut down mining farms in Inner Mongolia and Xinjiang were introduced in May, I wasn't worried," Lao Wu told his friend. Having been in this industry for a long time, he's known that since 2013, there have been crackdowns on mining every year or two, especially in Inner Mongolia, which relies on thermal power generation. "We're all used to it."
So while mining farms in Inner Mongolia were shutting down one after another, Lao Wu continued to buy second-hand mining machines online and attract more machines to be hosted in his mining farm. At the time, he calmly told his friends, "Don't panic."
As June approached, even Lao Wu was getting restless. The mine, located on the front lines of the local area, had received word of the situation through various channels, but Lao Wu still held onto hope. "Sichuan is different from Inner Mongolia and Xinjiang. There's a lot of surplus water and electricity here; it's all clean resources. If we don't use them, we'll just be wasting them."
The unsettling news initially began in Ya'an. On June 17, market rumors circulated that Ya'an, Sichuan, was implementing a blanket policy on mining operations, requiring all to be shut down by June 25, including both electricity and hydropower that had been wasted. On June 18, a notice issued by the Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau (regarding the cleanup and shutdown of virtual currency "mining" projects) began circulating in online communities, requiring 26 suspected virtual currency "mining" projects to be shut down by June 20.

On the evening of the 19th, Lao Wu finally gave up his wishful thinking, sighed, "I have to change careers again," shut down the constantly roaring mining machines, and began to transfer the mining farm.
Compared to miner Lao Long, Lao Wu is considered lucky. After all, Lao Wu's mining farm has been operating for several years, and the profits in the first few years were still considerable.
"I started building a hosting mining farm in Ganzi Prefecture in March this year, and it was completed in May. It has a capacity of 50,000 kilowatts and can accommodate more than 30,000 mining machines, but it was blocked by policies just before construction began," Lao Long told BlockBeats. The total investment in this mining farm was close to 20 million RMB, which can be said to be a complete loss. "After all, the profit of a hosting mining farm comes from the difference in electricity prices and hosting management fees."
The Bitcoin mining farm has been emptied. (Image courtesy of miners)
The government's swift and forceful policies and the nation's resolute attitude this time left Lao Long feeling somewhat hopeless. "I've been in this industry for five years, and there's always a policy crackdown every year or two, but this time it's just too severe. Mining farms, miners, mining pools—the entire mining community has been affected."
In the mining industry, Lao Long's experience is not the worst. "I have a friend who also runs a managed mining farm, which was already in operation. His mining farm had an investment of 160 million yuan and the total value of the mining machines reached 400 million yuan. However, after the policy was introduced, not only did the mining farm lose power and the mining machines stop running, but the roads in and out of the mining farm were also blocked, so the machines could not be transported out. He was in a complete mess."
Faced with mining disasters, selling mining machines has become a forced choice for many miners.
Unlike the famous mining machine sales point "SEG Building" in Shenzhen, although Chengdu is an important city for miners, the computer city known as Chengdu's "Zhongguancun" did not see a bustling scene of selling mining machines.
Media investigations revealed that no mining rigs were visible in Chengdu's computer malls. Upon further inquiry, vendors were found to be quite familiar with mining machines. "There are very few Bitcoin mining rigs available through offline channels right now. We need to check with our suppliers. Instead, there are more GPU mining rigs," a salesperson at the computer mall told someone looking to buy a mining rig.
In stark contrast to the sluggish offline market, online Bitcoin mining machines are being sold off at 50% off.
In the miner community, where reputation and privacy are highly valued, information from strangers can easily make them wary. They prefer to transact with miners and mining farms within the same circle who are familiar with each other. Therefore, the main trading market during this round of [mining crash] remains large online intermediaries and communities.
Mr. Tu from Bixin Technology told his friends, "The price of mining machines has now dropped by more than half, and it has entered a buyer's market where the price is determined by the buyers." Taking the Antminer S19 Pro 95t, which is currently common in the market, as an example, the price could reach 60,000 to 70,000 RMB at the peak of the bull market, while the current price in China is only 30,000+ RMB.
Antminer S19 online price at the time of publication; image courtesy of miners.
Some have also discovered that while foreign mining companies and farms are taking advantage of the domestic "mining crisis" to acquire mining machines at low prices, they are actually driving down the prices of these machines even further. One overseas buyer stated, "I hope to receive an S19j Pro at $40/T," which translates to only 252 RMB/T. A 100T machine would cost only 25,200 RMB, representing a near-rock-bottom price in recent months.
Such low prices indicate that the secondhand mining machine market is nearing saturation, and Bitmain previously announced a suspension of spot mining machine sales. However, some miners believe the prices are too low and are choosing to wait and see.
"Perhaps because I've experienced several rounds of policy crackdowns, I still believe the mining industry has a future," Lao Long told me. "Right now, mining machine prices are too low, so I'd rather shut down my machines and wait and see than sell them at a loss."
A veteran in the mining industry, Ah Hao, also told outsiders that most mining farms are currently shut down and observing the situation, not selling, and waiting for the policy to become clearer. "Most of them are struggling like this right now."
With their domestic survival space constantly shrinking, miners who are unwilling to sell their mining machines and leave the industry want to go overseas to find a way out.
Currently, Sichuan has approximately ten million mining machines ready to be shipped overseas. Ahao told me that if these machines remain in China, the owners and investors will face enormous financial costs. Similar to using leverage to speculate in real estate, many miners in the mining industry use loans to buy machines and build mining farms, carrying burdens of hundreds of millions of yuan. "They have to replenish their funds every day; they're very anxious," Ahao said.

Faced with the demand for overseas expansion, mining machine companies that have long been deployed overseas saw a business opportunity and designed a customized "overseas modular container" to address the difficulties faced by miners. This container integrates equipment such as heat and cold insulation, fans, networks, monitoring, and power distribution cabinets, essentially making it a mobile mining farm built from shipping containers.
Such a design naturally comes at a high price. Taking BitDeer as an example, the minimum unit price for each container is 142,000 yuan, which can accommodate 180 19-series mining machines. Given that domestic mining farms currently often have thousands of mining machines, the cost of shipping containers alone for a small to medium-sized mining farm is close to one million yuan, while large mining farms require tens of millions of yuan.
Currently, the main directions for mining companies to expand overseas are North America and the Middle East. In North America, represented by the United States and Canada, local policies are relatively stable and the legal system is relatively sound, and many large mining companies have already established themselves there. However, the overall cost of mining in North America is too high, and the United States also imposes a 25% tariff on Chinese electronic products.
Another relatively cheaper option is Kazakhstan. The region boasts abundant energy resources, is closer to China, has lower labor and construction costs, and tariffs are significantly lower than in the United States. However, its rule of law is weak, its business environment needs improvement, and, like China, policy is the biggest risk.
The journey to the West is long and arduous, and on the road to "obtain the true scriptures," there is no "Monkey King" to protect you, and you may encounter countless pitfalls.
Recently, industry insiders reported that in a mining farm in Kazakhstan, mining machines were looted as soon as they arrived, leaving the miners devastated.
"There are too many pitfalls in going to sea; it's not that easy." Ahao also thinks so. "Initially, Kyrgyzstan attracted mines by talking about attracting investment, but in the end, the army directly seized the Chinese mines, leaving them with nothing."
In countries with strong legal systems like the US and Canada, building mining farms overseas faces extremely high costs. Ahao told his friends that building a 10,000-capacity mining farm in China would cost approximately 3.5-5 million yuan. For the same scale, it would cost 18-40 million yuan overseas. Currently, Bitmain's offer is 18 million yuan, while Bitdeer's is 40 million yuan.
It is worth noting that despite the various resource connections and one-stop services involved in the process of going overseas, the ultimate losses are often borne entirely by the miners.
Western Development
Since the complete ban on Bitcoin mining activities in mainland China in June 2021, the Bitcoin computing center has shifted from China to North America.
By the end of 2021, the changes were already visible to the naked eye. According to the Bitcoin mining map created by the Cambridge Bitcoin Electricity Consumption Index, if we take the average monthly hashrate share as the standard, the global Bitcoin mining center was still in China in January 2021, but by December 2021, the center had shifted to North America.

Behind this change is the continuous rise of mining companies in North America. Since 2020, North American mining companies, led by Core Scientific (NASDAQ: CORZ), Riot Platform (NASDAQ: RIOT), Bitfarms (NASDAQ: BITF), and Iris Energy (NASDAQ: IREN), have begun to purchase mining machines in large quantities and have successively listed on the North American stock market, embarking on the path of compliant operation.
In February 2020, Bit Digital (NASDAQ: BTBT) went public.
In June 2021, Bitfarms, Hut 8 (TSE: HUT), and HIVE Digital (CVE:HIVE) went public.
Iris Energy went public in November 2021;
Core Scientific went public in January 2022;
Riot Platform was originally a biopharmaceutical company, but it took off after jumping on the cryptocurrency mining bandwagon.
These mining companies primarily engage in Bitcoin mining, and therefore their performance is highly correlated with Bitcoin prices. During the bull market from January 2021 to May 2022, their stock prices soared. According to Nasdaq data, compared to their initial public offerings, the stock prices of Core Scientific, Bitfarms, Hut 8, and HIVE Digital rose by as much as 57%, 707%, 371%, and 228%, respectively, during the crypto bull market.
The bull market from January 2021 to May 2022.
During this period, most mining companies achieved profitability through a combination of hashrate mining and debt/equity financing. Marathon Digital (MARA), for example, primarily engaged in self-operated Bitcoin mining. Its strategy involved financing the purchase of mining rigs to deploy mining farms, covering cash operating costs, and then holding Bitcoin as a long-term investment. Data shows that in 2021, Marathon Digital spent $120 million to purchase 30,000 Antminer machines from Bitmain, obtained a $100 million revolving credit line from Silvergate Bank, and planned to raise $500 million in debt through the issuance of senior convertible notes to continue purchasing mining equipment. At one point, it became the mining company with the largest Bitcoin holdings in North America.
Similarly, Core Scientific went even further, operating over 200,000 Bitcoin mining machines across five US states at one point, producing over 7,000 Bitcoins in June 2022 alone. Furthermore, Core Scientific received a $54 million investment from Celsius and signed a $100 million equity investment agreement with investment bank B. Riley.
However, due to their highly leveraged business nature, the sudden bear market caught these mining companies off guard.
First, Marathon Digital recorded a net loss of $686.7 million for the entire year of 2022; Riot Platform's net loss in 2022 was $509.6 million; Bitfarms' net loss in 2022 was $239 million; and Core Scientific had already lost more than $1.7 billion in the first nine months of 2022 alone, to the point that Core Scientific was on the verge of bankruptcy by the end of 2022.
According to a report by Hashrate Index, the total collective debt of major centralized mining companies exceeded $4 billion by the end of 2022. Core Scientific had the largest debt, owing creditors $1.3 billion as of September 30, 2022; Marathon Digital owed approximately $851 million, but most of it was in convertible notes; the third largest debtor was Greenidge Generation, owing $218 million.
Image source: Hashrate Index
Many institutions believe that the development of centralized mining companies is highly correlated with the price of Bitcoin. Therefore, "the business model of financing the purchase of Bitcoin mining machines is a great test of a company's cash flow management ability in a bear market," and it is also easy to face the risk of insolvency.
regular army
During the 2017 bull market, the cryptocurrency industry sowed the seeds of Bitcoin across the world. Across the ocean in China, a Bitcoin exchange called OKcoin quietly emerged. This exchange, dubbed the "Whampoa Military Academy" of the Chinese cryptocurrency world, was founded by Xu Mingxing. Xu Mingxing comes from the internet industry; previously, he was the CTO of Douban.com.
A large number of people are doing the same thing as Xu Mingxing. They are dedicated to solving another fundamental need—how to make Bitcoin more accessible to ordinary investors.
Miners need to pay for electricity, mining companies need to develop more advanced machines, and development teams need to be maintained—all of these require money. Bitcoin needs more support from the fiat currency world; it's a matter of life and death.
Following Bitcoin's first major bull market, cryptocurrency exchanges began to flourish. Exchanges such as OKcoin, Huobi, Binance, Coinbase, bitFlyer, BitMEX, Bitfinex, and Binance emerged.
Cryptocurrency exchanges bridged the gap, allowing investors to buy Bitcoin as easily as opening a stock account. For a considerable period, cryptocurrency exchanges were practically the only place for the general public to purchase Bitcoin.
Regardless of how Bitcoin's price fluctuates, wealth from the fiat currency world continues to flow into the digital currency world, supporting Bitcoin's trading price and enabling continuous innovation in the digital currency field.
From its inception, exchanges have been using various methods to expand their customer base in the fiat currency world. Most of these customers are investors who prefer new things and high-risk investments. However, for Bitcoin to truly enter the real world and reach the general public, more financial innovation is needed.
Bitcoin ATMs make it easier for investors to buy Bitcoin and represent one of the main directions of innovation in the digital currency world.
In February 2021, when the price of Bitcoin broke through $50,000, Wang Xing, founder of Meituan, made a statement on Fanfou on February 16. Satoshi Nakamoto is widely recognized as the father of Bitcoin and owns 1.12 million Bitcoins. Just two months after Wang Xing's statement, the price of Bitcoin rose by another 30%, exceeding $64,000.

The wealth-creation myth surrounding Bitcoin doesn't end there. On Wednesday, Coinbase, the largest cryptocurrency exchange in the US, went public, closing at $65.4 billion on its first day, surpassing CITIC Securities, China's largest securities firm.
Wang Xing is a supporter of Bitcoin. In late 2013, he bought Bitcoin, "to pay tribute to this extraordinary creation with practical actions." This investment yielded a return of about 100 times, even surpassing Meituan—one of the most successful technology companies in China over the past decade.


Bitcoin is now viewed as a form of currency, used for storing wealth and making payments, much like gold. Few Bitcoin supporters in China come from the financial industry. Most, like Wang Xing, are from the internet sector.
Xu Zhihong, a partner at CoinU, was among the earliest investors in Chinese concept stocks. In 2013, Xu received a wedding invitation from a friend. Unlike his previous large red envelopes, this time he prepared a special gift—a Bitcoin, worth approximately $300.
"You should keep this Bitcoin. When your child gets married, it can buy an apartment in Beijing." After giving it away, Xu Zhihong was still worried and instructed his friend to hold onto it for the long term.
Over the past decade, the price of friendship has remained stable, while the price of Bitcoin has skyrocketed. Now, nobody gives Bitcoin as a wedding gift to a friend anymore.
"Bitcoin will quickly (within 1.5-2 years) approach 80% of gold's market capitalization, or $400,000 per coin," predicted Chen Weixing, founder of Kuaidi Dache. After merging with Didi, Chen Weixing ventured into blockchain, founding DacheChain. Similar predictions are becoming increasingly common as Bitcoin's price rises.
Bitcoin proponents often mention the word "faith." Only investors with "faith" can overcome obstacles, weather bull and bear markets, hold Bitcoin, and amass great wealth. Those who establish exchanges to make Bitcoin more accessible to investors are more like evangelists. Do they truly have faith in digital currency?
There are two even greater hurdles for Bitcoin: how to get it into the investment portfolios of mainstream financial institutions and how to get it onto the balance sheets of listed companies—these are extremely difficult.
Over the past decade, Bitcoin has been the most popular investment globally—rising from $0.10 to $64,000. Unfortunately, this investment has been ignored for a decade, with almost all investment institutions worldwide missing out.
"Currently, most financial institutions and banks cannot buy Bitcoin, and it will take a long time to reach a consensus," said Zhu Xiaohu of GSR Ventures in an interview with Tencent Technology. He has invested in a series of cutting-edge technology companies such as Didi, ofo, and Inke. He is there wherever there is a trend.
"Currently, the biggest limitation for institutional participation in Bitcoin investment is still the financial regulations of various countries," said Yuan Yuming, CEO of Huolian Technology. In 2018, Yuan Yuming, then chief TMT analyst at Industrial Securities, announced his move to Huobi China, which caused a sensation in the industry.
Microstrategy, Silicon Valley and Wall Street
When asked why this new round of market activity occurred, almost all cryptocurrency professionals gave the same answer—the United States.
"The center of blockchain innovation has always been the United States, and in the last two years, blockchain innovation, especially Ethereum innovation, has basically had nothing to do with China," said Chen Yong, founder of CoinU, who was senior vice president of Cheetah Mobile before entering the cryptocurrency industry. "This still doesn't change the fact that the foundation of financial innovation in the United States is still there."
Micro Strategy, an American company, is also buying Bitcoin.

In August 2023, MicroStrategy CEO Michael Saylor tweeted, reminiscing about MicroStrategy's Bitcoin purchase three years prior. MicroStrategy bought Bitcoin on August 11, 2020, at an average price of $11,653, spending $250 million to acquire 21,454 Bitcoins at the time.
Over the past three years, precious metals, often considered "safe havens," have experienced varying degrees of decline, while major US stock indices have risen by nearly 10% annually. Bitcoin, however, led the pack with a 145% increase, resulting in substantial profits for MSTR, which heavily invested in Bitcoin, and a further increase of over 200% in its stock price.
As of January 25, 2026, according to the company's latest announcement on January 26, 2026, MicroStrategy has further increased its Bitcoin holdings over the past few years, accumulating 712,647 Bitcoins with a total investment of approximately $54.19 billion and an average purchase cost of approximately $76,037. Simultaneously, the company has also raised funds through its At-the-Market (ATM) issuance plan to provide stable ammunition for future Bitcoin investments, demonstrating that its long-term bullish strategy on Bitcoin remains unchanged.
The company stated that the funds for this Bitcoin purchase mainly came from the proceeds of its stock ATM issuance plan, continuing its strategy of converting these funds into Bitcoin holdings through the capital market.
Besides MicroStrategy, there is another American asset management company that has broken down the boundaries between the digital currency world and traditional finance—it is generally known in the industry as Grayscale Fund.
In the world of Bitcoin, holding 1,000 Bitcoins is called a whale, and there are approximately 2,000 whales worldwide.
Of all the whales, Grayscale is undoubtedly one of the largest—at its peak, it managed over 650,000 Bitcoins. As of late January 2026, according to CoinGlass data, the total amount of Bitcoin held in custody by the Grayscale Bitcoin Trust (GBTC) and related products was approximately 161,000. This figure is constantly changing as Grayscale's spot ETF holdings fluctuate dynamically based on investor redemptions and purchases.
Holdings dynamics: According to relevant reports, holdings were high at the beginning of the year, but there has been a significant net outflow in the past month.
Management scale:As of January 23, 2026, its assets under management (non-GAAP) were approximately US$14.395 billion.
Barry Hilbert, founder of Grayscale Fund
Grayscale Investments, through its innovative financial products, has for the first time reduced the difficulty of purchasing Bitcoin assets to that of buying US stocks. With just a US stock account, one can trade GBTC like buying and selling stocks, without worrying about complicated deposit processes or platform collapses.
For a long time, Grayscale Fund continued to grow at a rate of 2,000 bitcoins per day, rapidly expanding its scale. Its innovation was also very simple: setting up a trust fund of crypto assets to hold bitcoins, with investors holding trust shares that could be traded on the secondary market.
"Institutions in the United States currently participate in Bitcoin investment mainly in two ways: one is to purchase shares through trust fund products (ETPs) operated by institutions such as Grayscale and 21Shares, and the other is to purchase directly through compliant trading platforms such as Coinbase," Yuan Yuming explained.
In the United States, the annual management fee rate for trust funds is generally between 0.3% and 1.5%. Grayscale products, on the other hand, have annual management fees ranging from 2% to 2.5%. Even without doing anything, Grayscale funds can collect tens of thousands of bitcoins in management fees annually.
Grayscale Investments is a prime example of a Bitcoin startup. It makes it easier for more investors to hold Bitcoin—and reap huge returns. The profit-driven behavior of these financial institutions brings a continuous stream of investors to Bitcoin, driving its sustained price increase.
"Bitcoin transactions are an 'extremely inefficient method,' and the energy consumed in processing these transactions is staggering," U.S. Treasury Secretary Janet Yellen once criticized Bitcoin, adding, "Bitcoin is frequently used for illicit financing, and investors should be wary."
Despite Yellen's dislike of Bitcoin, this hasn't hindered financial innovation in the US related to it. In September 2017, the People's Bank of China, along with seven other ministries, completely banned ICOs. However, three months later, the Chicago Mercantile Exchange launched Bitcoin futures.
Today, top global asset management firms like Bridgewater and BlackRock are eager to enter the market. Financial institutions can use your money to buy any asset, as long as they receive management fees.
On the other side is Silicon Valley, a hub of innovation, where FOMO (Fear of Missing Out) exists.
Twitter founder Jack Dorsey is a well-known American technology leader and a more ardent advocate of cryptocurrency than Musk. He believes that cryptocurrency will become the world's "single currency."
While Twitter is a household name, it's not Dorsey's most successful business venture. His Square, a pioneer in Bitcoin innovation, currently boasts a market capitalization of $120 billion, twice that of Twitter. If Grayscale Investments is like a pump drawing money from the fiat currency world into the Bitcoin world, then Silicon Valley tech companies have invented new tools to nibble away at Bitcoin's reserves like ants carrying grains of sand.
In January 2018, Square's Cash App launched a new feature allowing users to buy Bitcoin. "In 2020, 3 million people bought Bitcoin through Cash App, and another 1 million were added in January 2021," data disclosed by Square's CFO indicates that Bitcoin is entering the wallets of the general public through various means.
Under pressure from competitors, in October 2020, PayPal, the world's leading online payment tool, announced that it would support the purchase of cryptocurrencies such as Bitcoin and Litecoin.
Research shows that the amount of Bitcoin held on exchanges has decreased from 3 million to 2.2 million in the past year, a reduction of 800,000 coins. The amount of Bitcoin held on exchanges continues to decrease.
In February 2021, Tesla announced that it had purchased $1.5 billion worth of Bitcoin and that Tesla cars could be purchased with Bitcoin. The price of Bitcoin immediately surged by 10%.

Musk also announced that customers will be able to purchase Tesla cars with Bitcoin, and Tesla will not sell these Bitcoins.
Tesla wasn't the first tech company in the world to take this step. In 2020, Square invested approximately $50 million to purchase 4,709 Bitcoins. Square's attempt brought Bitcoin to the balance sheet of a US-listed company for the first time, and it was recognized by accounting standards.
The limited supply of Bitcoin and the ever-increasing demand are creating an increasingly serious supply-demand imbalance.
On June 16, 2023, BlackRock, one of the world's largest asset management groups, filed a filing with the U.S. Securities and Exchange Commission (SEC) through its subsidiary iShares for a spot Bitcoin ETF. According to the filing, the ETF is named "iShares Bitcoin Trust," and its assets primarily consist of Bitcoin held on behalf of a custodian, which is custodianed through the cryptocurrency exchange Coinbase.
As an asset management company with over $10 trillion in assets under management, BlackRock's assets even far exceed Japan's 2018 GDP of $4.97 trillion. BlackRock, Vanguard Group, and State Street Bank were once known as the "Big Three," controlling the entire US index fund industry. Therefore, BlackRock's filing for a spot Bitcoin ETF with the US SEC...
BlackRock's application for a spot Bitcoin ETF was not entirely unexpected. Back in early 2021, BlackRock CEO Larry Fink publicly stated that he was "bullish on Bitcoin to become a global market asset," and its Chief Fixed Income Investment Officer Rick Rieder subsequently indicated that BlackRock had begun to venture into Bitcoin.
In the same year, BlackRock stated that its global allocation funds had gained some exposure to Bitcoin through CME's Bitcoin futures offerings. Two BlackRock fund companies, the BlackRock Global Allocation Fund and BlackRock Funds V, stated in their 497 Prospectus filing with the U.S. Securities and Exchange Commission that certain of their funds could participate in Bitcoin-based futures contract trading. The prospectus also stated that not all Bitcoin futures contracts were investable, but only those registered with the U.S. Commodity Exchange Commission (CFTC) and settled in cash.
Image source: BlackRock Funds V 497 Prospectus
The ARK 21Shares BTC ETF, a collaboration between Ark Investment Management and 21Shares, has been seeking approval since 2021. This year alone, eight major financial institutions, including BlackRock, have submitted applications for Bitcoin ETFs to the U.S. SEC.
The story of Grayscale is more representative when it comes to Bitcoin spot ETFs.
Grayscale's Bitcoin Trust (GBTC) is one of several financial instruments that allow investors to trade stocks in a trust that holds a large amount of Bitcoin, with each stock priced close to the price of Bitcoin.
The Grayscale Bitcoin Trust works by inviting wealthy private investors to donate funds to the fund, which is then used to purchase large amounts of Bitcoin. Grayscale lists the fund on a public stock exchange, meaning anyone can trade its shares. The fund's share price tracks the price of Bitcoin, but not exactly. The fund's shares can be traded at a premium or discount to the actual price of Bitcoin. Historically, they have almost always traded at a premium. This is good news for Grayscale and its investors, who profit from this premium.
In October 2021, Grayscale filed a 19b-4 document with the U.S. Securities and Exchange Commission (SEC) to apply for a Bitcoin spot ETF, hoping to convert GBTC into a Bitcoin spot ETF, but this was also rejected. SEC Commissioner Mark Uyeda stated on the sidelines of the ICI Global Asset Management Asia Forum in Singapore, "We have received many applications to date, and none of them have been approved." Uyeda stated that the SEC considers applications submitted by trading platforms based on their "actual circumstances."
After Grayscale's application was rejected, it even engaged in legal debate with the SEC in the District Court for Appeals of the District of Columbia. The SEC argued that Bitcoin futures ETFs are more resistant to manipulation than the spot market, using this as one of the reasons for rejecting Grayscale's spot ETF application. Judge Rao questioned this, stating, "The SEC needs to explain how it understands the relationship between Bitcoin futures and spot prices. A futures contract is essentially just a derivative. They are together 99.9% of the time, so what difference does the SEC see between them?" The SEC also argued, "99% correlation does not equal causation. Futures data refers to prices on a daily basis, not intraday prices. In the SEC's view, the Bitcoin spot market is undeniably decentralized, in stark contrast to Bitcoin futures traded solely on the Chicago Mercantile Exchange (CME)."
After years of litigation, Grayscale won its case on August 30th, overturning the SEC's decision to block the Grayscale ETF. While this victory doesn't mean GBTC can be freely converted into an ETF, "it brings the conversion process one step further."
According to court documents, a three-judge appeals panel in Washington overturned the Securities and Exchange Commission's (SEC) decision to block Grayscale's ETF. The court stated that "the rejection of Grayscale's proposal was arbitrary and capricious, as the SEC failed to explain its different treatment of similar products."

Grayscale stated that "this ruling is a landmark step forward for U.S. investors and the Bitcoin ecosystem." It's a milestone because if a Bitcoin spot ETF is launched, it will be a historic moment for cryptocurrencies. At that time, GBTC is expected to be successfully converted into an ETF, and its negative premium will disappear.
New EcosystemThe Bitcoin Taproot upgrade inadvertently opened up a new design space, allowing users to inscribe any content on the blockchain.
The Bitcoin ecosystem saw some unexpected developments in 2023, including BRC20, Ordinals, and Bitcoin NFTs. Companies like Yuga Labs, Degods, and even real-world supercar brands like Bugatti entered the fray. Related infrastructure developed rapidly, including marketplaces (Magic Eden, Gamma, Ordswap, Ordinals Wallet, etc.), wallets compatible with Bitcoin NFTs (Hiro, UniSat, Xverse, etc.), aggregators (bestinslot.xyz), and more sophisticated browsers (OrdinalHub, ordiscan).
On October 8, 2023, according to Dune data, the total mintage of the Bitcoin NFT protocol Ordinals has exceeded 35 million, reaching 35,274,213, with the current total transaction fees at 2,121.1597 BTC (approximately $59,385,414).
The emergence of these practices has led to a surge in gas fees. From a miner's perspective, this is undoubtedly a good thing, as the Bitcoin block space was virtually barren from the summer of 2021 to early 2023, and miners' income was meager. But for some who cannot afford the high gas fees, this is not good news. "I mainly work in Africa. They don't have the privilege of paying these high fees like you do. They really need BTC, and you guys are just playing around," Bitcoin educator and Anita Posch wrote on Twitter.

However, the BRC20 and Bitcoin NFTs have challenged Bitcoin's original 1MB block size limit, and its value has been questioned.
"This is not what Ethereum is built for!" This was Vitalik's assessment of BAYC in a Time magazine interview in March 2022. Even in the diverse Ethereum ecosystem, the development of NFT "IP giants" like Yuga Las is not recognized by OG developers.
In the Bitcoin ecosystem, this "resistance to industrial culture" seems even stronger, with many Bitcoin OGs even completely denying the legitimacy of NFTs on the Bitcoin network, declaring "This is not what Bitcoin is built for."

Udi Wertheimer, the founder of Meme NFT Taproot Wizards, orchestrated the largest block and transactions in Bitcoin history, with a block size of nearly 4MB, which has been called "the largest Bitcoin block ever" and has been accused by many of being an attack on Bitcoin.
Blockstream CEO Adam Back, Bitcoin Core developer LukeDashjr, and others believe this will cause the Bitcoin blockchain to expand rapidly, significantly increasing the equipment requirements for running full nodes and leading to a decrease in the number of full nodes across the network, thus reducing censorship resistance. Simultaneously, unexpectedly large transactions and blocks will overwhelm ecosystem infrastructure such as wallets, mining pools, and browsers, causing some facilities to malfunction, such as certain transactions failing to be parsed correctly. Furthermore, to reduce the time spent synchronizing and verifying large transactions and blocks, mining pools or miners may choose not to download or verify the transactions and blocks before releasing them, posing security risks.
They even harshly criticized Taproot Wizard's actions, stating, "This is an attack on Bitcoin. Bitcoin blocks have a 1MB limit, but Taproot Wizard's 4MB data is uploaded to the blockchain in the witness section. Both the block and the transaction bypass the 1MB limit. 4MB is acceptable, 400MB is also acceptable! In this sense, this is not innovation, but an attack on a vulnerability!"
Udi responded that he owns a large amount of BTC and is doing so to make it stronger. Like anything resilient, what doesn't kill it makes it stronger.
He wanted to prove a point: the activity surrounding Bitcoin had stagnated, and he wanted to change that, knowing that if someone like him truly posed a threat to Bitcoin, then Bitcoin should fail.

Just as no one can decide whether Bitcoin will fork, no one can dictate Bitcoin's development path based on the opinion of a single person. Knowing that Bitcoin has no CEO, its governance structure consists of users who pay transaction fees, miners who build the Bitcoin blockchain, and node operators who verify the transaction ledger. This decentralized structure, to some extent, ensures Bitcoin's security and decentralization, but it also presents challenges for governance.
Behind these debates lies not only a disagreement about technology, but more profoundly, a question about the purpose of Bitcoin and the philosophy behind it. Governing decentralized open-source projects remains a challenge.
Binance Bitcoin price on January 26, 2026
Seventeen years have passed, and the price has repeatedly surpassed each previous high. One thing is certain: the spirit and culture of Bitcoin will never wither because of differences of opinion within the community. Each of us is not only a witness to this history, but also a participant deeply involved in it.
Bitcoin, seventeen years old, is still changing the world.
Having weathered the rain, I'm willing to hold an umbrella for the韭菜 (a metaphor for inexperienced investors)! Writing is hard work, so follow me on my cryptocurrency journey to learn more Web3 insights. Let's walk this path together! 👍👍