Bitcoin Investment: The Evolution from High Risk to Best Timing

In February 2011, Bitcoin first broke through the $1 barrier, triggering widespread discussion in the financial community. At that time, I was managing a team providing ETF data and analysis services, and we discussed this milestone event in a meeting. Although there was an opportunity to invest in Bitcoin at that time, most people chose to wait and see due to the significant risks that existed.

Looking back at history, we should not blame ourselves for missing early investment opportunities. In the early development of Bitcoin, there were indeed many uncertainties in investing in it. For example, the terms of service of the largest cryptocurrency exchange at that time were filled with risks, and investors had to transfer funds to unknown accounts. In addition, there were many risk factors such as custody, regulation, technology, and government intervention.

However, over time, Bitcoin has gradually eliminated these significant risks. The reliability of trading platforms has improved, well-known financial institutions have begun to offer custody services, and the regulatory environment has become clearer. In January 2024, the launch of the Bitcoin spot ETF has further cleared the way for institutional investors to enter this field.

Nevertheless, a significant concern has always existed: will the government ban Bitcoin? This question has troubled many investors and analysts. However, a recent decision has completely dispelled this worry. The U.S. government has decided to establish a strategic Bitcoin reserve, a move that not only eliminates the possibility of Bitcoin being banned but also indicates official recognition of its value.

The logic behind this decision is very simple: although the status of the US dollar as the world's reserve currency is still the most ideal situation, if a substitute is needed in the future, Bitcoin is undoubtedly a better choice than other currencies. This strategic consideration has led to unprecedented recognition and support for Bitcoin.

For investors, this means that the risk-reward ratio of Bitcoin has fundamentally changed. In the past, due to high risks, investors would typically allocate only a small portion of their portfolios (around 1%) to Bitcoin. However, in the current environment, we see this proportion rising to 3%, and it may even reach 5% or higher.

Overall, Bitcoin has gradually evolved from a high-risk speculative asset to a widely recognized investment option. With the elimination of the last significant survival risk, now may be the best time in history to invest in Bitcoin.