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Home web3.0 Institutions and retail investors are crazily chasing each other, why can Bitcoin become a 'hot commodity'?

Institutions and retail investors are crazily chasing each other, why can Bitcoin become a 'hot commodity'?

Jul 29, 2025 pm 02:30 PM
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Bitcoin has become a "hot commodity" because of its multiple attractiveness: 1. Because of its constant total volume and halving mechanisms, it is regarded as anti-inflation "digital gold" and is used by enterprises as asset reserves; 2. The development of traditional financial infrastructure such as ETFs and compliance platforms has lowered the threshold for institutional investment; 3. Historical surge has triggered retail FOMO sentiment, and leverage and social media have promoted the speculative boom; 4. The decentralized concept represented by its blockchain technology attracts technology believers. Despite price fluctuations, regulation and energy consumption disputes, Bitcoin is still the product of the interweaving of asset allocation, speculative psychology and technological ideals under financial uncertainty, reflecting the continuous pursuit of wealth by human nature.

Institutions and retail investors are crazily chasing each other, why can Bitcoin become a

Why does Bitcoin become a "hot commodity"?

In recent years, Bitcoin has become the focus of the global capital market from a "digital toy" in the geek circle. Not only are retail investors flocking to it, but institutional giants have also entered the market to make plans. Why can this non-sovereign cryptocurrency attract such a crazy pursuit? Behind it is the superposition of multiple logics.

1. "Digital Gold" under the anti-inflation narrative
The core attraction of Bitcoin lies in its scarcity - the total volume is constant at 21 million, and the production is halved every four years, making it an ideal target to fight against the over-issuance of legal tender. Especially in the context of global central banks' huge profits after 2020, institutions regard Bitcoin as "digital gold." MicroStrategy, Tesla and other companies have purchased Bitcoin as balance sheet reserves, further strengthening this narrative. Despite the volatile volatility of Bitcoin, long-term holders value their potential to fight currency depreciation more.

2. The improvement of traditional financial infrastructure Bitcoin compliance process has accelerated institutional entry. The launch of US Bitcoin futures ETFs, the application of spot ETFs by asset management giants such as BlackRock, and the maturity of compliant trading platforms such as Coinbase provide low-threshold investment channels for traditional funds. Even sovereign states (such as El Salvador) have set bitcoin as fiat currency, despite its huge controversy, have boosted its recognition as an asset class.

3. The FOMO sentiment and speculation of retail investors have driven the multiple surges in Bitcoin's history (such as 2017 and 2021) to create a large number of "rich-making myths" and stimulate retail investors' "miss-phobia" (FOMO). The popularity of decentralized finance (DeFi) and leverage tools has further amplified the space for speculation. In addition, social media and celebrity effects (such as Musk's platform) have helped boost irrational prosperity, forming a spiral of prices and emotions in the short term.

4. Some supporters of technological beliefs and decentralization ideals regard Bitcoin as a "revolution" to the traditional financial system. The transparency and censorship resistance of its blockchain technology have attracted groups that do not trust the central bank system. Although Bitcoin has limited practical application scenarios (payment efficiency is much lower than traditional systems), the ideology of "digital freedom" has given it a blessing of faith beyond practical value.

Risk and dispute coexist
Bitcoin's fanaticism is also accompanied by huge risks: extreme price fluctuations (it is common for a single day to rise or fall by more than 20%, regulatory uncertainty (such as China's total ban on transactions), energy consumption disputes, etc. Whether its value comes from "consensus" or bubbles is still the focus of debate.

Conclusion
Bitcoin has become a "hot commodity", essentially a mixture of asset allocation needs, speculative psychology and technological beliefs under traditional financial uncertainty. Whether viewed as a revolutionary asset or a giant bubble, its fluctuation history has proven-in the alternation of fanaticism and panic, the only thing that remains unchanged is the pursuit of wealth by human nature.

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