Bitcoin (BTC) Is the Ultimate Asymmetric Opportunity: Uncovering the Deep Logic of Bitcoin's Price Fluctuations

Yesterday, the price of Bitcoin broke through the $100,000 mark, igniting the enthusiasm of the market, and social media was full of cheers of "the bull market is back".

Author: Daii

Compiled by: Vernacular Blockchain

Yesterday, the price of Bitcoin broke through the $110,000 mark, igniting the enthusiasm of the market, and social media was full of cheers of "the bull market is back". However, for those investors who hesitated at $76,000 and missed the opportunity to enter the market, this moment is more like an inner self-questioning: Am I late again? Should I buy decisively during the pullback? Will there be opportunities in the future?

This leads to the core of our discussion: Is there really a "value investment" perspective in an asset like Bitcoin that is known for its extreme volatility? Can this strategy, which seems to contradict its "high risk, high volatility" characteristics, capture "asymmetric" opportunities in this turbulent game?

In the investment world, asymmetry refers to situations where potential gains far outweigh potential losses, or vice versa. At first glance, this doesn’t seem to be a characteristic of Bitcoin. After all, most people’s impression of Bitcoin is that it’s either a quick win or a loss.

However, behind this polarized perception lies an overlooked possibility: during Bitcoin’s periodic deep declines, a value investing approach could create an extremely attractive risk-reward structure.

Looking back at the history of Bitcoin, it has plunged 80% or even 90% from its highs many times. At these moments, the market was shrouded in panic and despair, and the capitulation selling made the price seem to return to the starting point. But for investors who deeply understand the long-term logic of Bitcoin, this is a classic "asymmetric" opportunity - risking limited losses in exchange for potential huge returns.

Opportunities like these don’t come around often. They test investors’ cognitive abilities, emotional control, and long-term convictions. This raises a more fundamental question: Do we have reason to believe that Bitcoin truly has “intrinsic value”? If so, how can we quantify and understand it, and develop investment strategies accordingly?

In the following content, we will embark on this journey of exploration: revealing the deep logic behind Bitcoin price fluctuations, clarifying the shining points of asymmetry when "blood flows", and thinking about how the principles of value investment can be reborn in the era of decentralization.

But first, you need to understand that asymmetric opportunities are never scarce in Bitcoin investing; in fact, they are abundant.

Why does Bitcoin have so many asymmetric opportunities?

If you scroll through Twitter today, you’ll see overwhelming celebration of Bitcoin’s bull run. As the price breaks $110,000, many people on social media are declaring that the market always belongs to the prophets and the lucky ones.

But if you look back, you will find that the invitation to this feast was actually sent out at the most desperate moment of the market; it’s just that many people lacked the courage to open it.

1.1 Historical asymmetric opportunities

The growth of Bitcoin has never been a straight upward curve. Its historical script is intertwined with extreme panic and irrational enthusiasm. Behind every deep decline, there are extremely attractive "asymmetric opportunities" - the maximum loss you bear is limited, and the return you get may be exponential.

Let us travel through time and space and speak with data.

2011: -94%, from $33 to $2

This was the first time that Bitcoin became "widely known", and the price soared from a few dollars to $33 in half a year. But soon, the crash followed. The price of Bitcoin plummeted to $2, a drop of 94%.

Imagine the desperation at the time: major geek forums were deserted, developers fled, and even core Bitcoin contributors expressed doubts about the project's prospects on the forums.

But if you took a gamble and invested $1,000 at the time, when the price of Bitcoin exceeded $10,000 many years later, your holdings would be worth $5 million.

2013-2015: -86%, Mt. Gox collapse

At the end of 2013, the price of Bitcoin exceeded $1,000 for the first time, attracting global attention. But the good times did not last long. In early 2014, Mt.Gox, the world's largest Bitcoin trading platform, declared bankruptcy, and 850,000 Bitcoins disappeared from the blockchain.

Overnight, the media was unanimous: "Bitcoin is over." CNBC, BBC and The New York Times all reported the Mt. Gox scandal on their front pages. The price of Bitcoin fell from $1,160 to $150, a drop of more than 86%.

But what happened next? By the end of 2017, the same Bitcoin