Bitcoin Breaks $110,000 to Set New High: Is It Too Late for Value Investment to Get on Board?

Yesterday, Bitcoin's price broke through the $110,000 mark, igniting market enthusiasm. For those investors who missed the opportunity to get on board, they can't help but question themselves: Am I too late? Should I decisively buy during the pullback? Will there be opportunities in the future?

This raises a core question: is there really a "value investing" perspective in an asset as volatile as Bitcoin? Can this strategy, which seems to contradict its "high risk, high volatility" characteristics, capture "asymmetrical" opportunities in this turbulent game?

In the investment world, asymmetry refers to situations where potential gains far exceed potential losses, or vice versa. At first glance, this does not seem to be a characteristic of Bitcoin. However, during Bitcoin's periodic deep downturns, value investment approaches may create highly attractive risk-return structures.

Looking back at the history of Bitcoin, it has experienced multiple crashes of 80% or even 90% from its peaks. During these moments, the market is shrouded in panic and despair, with capitulation sell-offs making prices seem as if they have returned to the starting point. However, for investors who deeply understand the long-term logic of Bitcoin, this represents a classic "asymmetric" opportunity—taking on limited loss risk in exchange for potential massive returns.

Such opportunities are rare. They test investors' cognitive levels, emotional control, and belief in long-term holding. This raises a more fundamental question: do we have reason to believe that Bitcoin truly has "intrinsic value"? If so, how do we quantify and understand it, and based on that, formulate investment strategies?

Why does Bitcoin have so many asymmetrical opportunities?

The growth trajectory of Bitcoin has never been a straight line; its historical narrative is interwoven with extreme panic and irrational fervor. Behind every deep decline lies an enticing "asymmetrical opportunity"—the maximum loss you incur is limited, while the potential returns can be exponential.

Let us review a few key moments:

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

This is the first moment when Bitcoin became "widely known," with the price skyrocketing from a few dollars to 33 dollars within six months. But soon, the crash followed. Bitcoin's price plummeted to 2 dollars, a decline of 94%.

Imagine the desperation at that time: the main geek forum was desolate, developers were fleeing, and even core Bitcoin contributors expressed doubts about the project's prospects on the forum.

But if you "bet a bit" at that time and invested $1000, when the price of Bitcoin breaks $10,000 many years later, your position will be worth $5 million.

2013-2015: -86%, a major trading platform collapsed

At the end of 2013, the price of Bitcoin first broke through 1000 USD, attracting global attention. However, the good times did not last long. In early 2014, the world's largest Bitcoin exchange announced bankruptcy, and 850,000 Bitcoins disappeared from the blockchain.

Overnight, the media was unanimous: "Bitcoin is finished." Mainstream media reported this scandal on the front page. The price of Bitcoin plummeted from $1160 to $150, a drop of more than 86%.

But what happened next? By the end of 2017, the same Bitcoin price reached 20,000 US dollars.

2017-2018: -83%, ICO bubble burst

2017 was the "Year of Mass Speculation", when Bitcoin entered the public eye. Countless ICO projects emerged, and white papers were filled with terms like "disruption", "reconstruction", and "decentralized future", leading the entire market into a frenzy.

But as the tide receded, Bitcoin fell from its historical high of nearly $20,000 to $3,200, a decline of over 83%. That year, Wall Street analysts mocked: "Blockchain is a joke"; regulatory agencies initiated multiple lawsuits; retail investors were liquidated and left the market, and the forums were silent.

2021-2022: -77%, industry "black swan" chain explosions

In 2021, Bitcoin wrote a new myth: each coin's price broke through $69,000, with institutions, funds, countries, and retail investors rushing in.

But just a year later, Bitcoin fell to $15,500. The collapse of a stablecoin, the liquidation of a hedge fund, the explosion of an exchange... the continuous "black swan" events destroyed the entire crypto market's confidence like a domino effect. The fear and greed index once dropped to 6 (extreme fear zone), and on-chain activity was almost frozen.

However, by the end of 2023, Bitcoin quietly rebounded to $40,000; after the ETF approval in 2024, it soared to today's $90,000.

The Source of Asymmetric Opportunities in Bitcoin

Bitcoin has repeatedly achieved astonishing rebounds in times that seem disastrous throughout history. So the question arises—why? Why can this high-risk asset, often ridiculed as a "game of hot potato," rise again and again after a crash? More importantly, why can it offer such a strong asymmetric investment opportunity for patient and knowledgeable investors?

The answer lies in three core mechanisms:

Mechanism 1: Deep Cycle + Extreme Emotion Causes Price Deviation

Bitcoin is the world's only 24/7 open free market. There is no circuit breaker, no market maker protection, and no central bank safety net. This means it amplifies human emotional fluctuations more easily than any other asset.

In a bull market, FOMO (Fear of Missing Out) dominates the market, retail investors chase high prices madly, narratives soar, and valuations are severely overdrawn; in a bear market, FUD (Fear, Uncertainty, Doubt) floods the internet, calls to "cut losses" arise one after another, and prices are trampled into the dust.

This cycle of amplified emotions often leads Bitcoin to enter a state of "seriously deviating from its true value." And this is exactly the fertile ground where value investors seek asymmetric opportunities.

In summary: In the short term, the market is a voting machine; in the long term, it is a weighing machine. The asymmetric opportunity of Bitcoin appears at the moment before the weighing machine starts.

Mechanism 2: Extreme price fluctuations, but a very low probability of death

If Bitcoin is really the "asset that could go to zero at any time" that the media often sensationalizes, then it indeed has no investment value. But in fact, it has survived every crisis—and come out stronger.

In 2011, after falling to $2, the Bitcoin network continued to operate as usual.

In 2014, after a certain trading platform collapsed, a new trading platform quickly filled the void, and the number of users continued to grow.

In 2022, after a certain exchange went bankrupt, the Bitcoin blockchain continued to generate a new block every 10 minutes without interruption.

The underlying infrastructure of Bitcoin has almost no history of downtime. Its system resilience far exceeds most people's understanding.

In other words, even if the price is halved again and again, as long as the technical foundation and network effects of Bitcoin remain, there is no real risk of going to zero. We have a highly attractive structure: limited short-term downside risk and open long-term upside potential.

This is asymmetry.

Mechanism Three: Intrinsic value exists but is ignored, leading to an "oversold" state

Many people believe that Bitcoin has no intrinsic value, and therefore its price can fall indefinitely. This view overlooks several key facts:

Bitcoin has algorithmic scarcity (a hard cap of 21 million coins, enforced by a halving mechanism);

It is protected by the world's most powerful proof-of-work (PoW) network, with quantifiable production costs;

It benefits from a strong network effect: over 50 million addresses have a non-zero balance, and trading volume and hash rate are hitting new highs;

It has been recognized by mainstream institutions and even sovereign nations as a "reserve asset" (ETF, legal tender status, corporate balance sheets).

This raises the most controversial yet crucial question: Does Bitcoin have intrinsic value? If so, how do we define, model, and measure it?

Will Bitcoin go to zero?

It's possible—but the probability is extremely low. A certain website has recorded 430 times that Bitcoin has been declared "dead" by the media.

However, beneath this death declaration count, there is a small note: if you had bought $100 worth of Bitcoin every time it was declared dead, today your holdings would be worth over $96.8 million.

You need to understand: the underlying system of Bitcoin has been running stably for over a decade, with almost no downtime. Whether it's the collapse of an exchange, the failure of a stablecoin, or a scandal involving an exchange, its blockchain consistently generates a new block every 10 minutes. This technical resilience provides a strong survival baseline.

Now, you should be able to see that Bitcoin is not "baseless speculation". On the contrary, its asymmetric potential stands out precisely because there is a long-term value logic that is often severely underestimated by market sentiment.

This leads to the next fundamental question: Can a Bitcoin that has no cash flow, no board of directors, no factories, and no dividends really become an object of value investment?

Can Bitcoin be a value investment?

Bitcoin is notorious for its extreme price volatility. People swing between extreme greed and fear. So, how does an asset like this fit into "value investing"?

On one side are the classic value investing principles of Benjamin Graham and Warren Buffett – "margin of safety" and "discounted cash flow". On the other side is Bitcoin – a digital commodity without a board of directors, no dividends, no earnings, and even no legal entity. Within the traditional value investing framework, Bitcoin seems to have no place.

The real question is: how do you define value?

If we go beyond traditional financial statements and dividends, returning to the core essence of value investing—buying below intrinsic value and holding until value is realized—then Bitcoin may not only be suitable for value investing, but it may even embody the concept of "value" more purely than many stocks.

Benjamin Graham, the father of value investing, once said: "The essence of investing is not in what you buy, but in whether you buy it at a price lower than its value."

In other words, value investing is not limited to stocks, companies, or traditional assets. As long as something has intrinsic value and its market price is temporarily below that value, it can be an effective target for value investing.

But this raises a more critical question: if we cannot use traditional indicators like the price-to-earnings or price-to-book ratios to estimate the value of Bitcoin, where does its intrinsic value come from?

Although Bitcoin does not have financial statements like a company, it is far from worthless. It has a fully analyzable, modelable, and quantifiable value system. While these "value signals" are not organized into quarterly reports like stocks, they are just as real—and may even be more consistent.

We will explore the intrinsic value of Bitcoin from two key dimensions: supply and demand.

Supply Side: Scarcity and Programmatic Deflation Model (Stock-Flow Ratio)

The core value proposition of Bitcoin lies in its verifiable scarcity.

Fixed total supply: 21 million coins, hard-coded and unchangeable.

Halving every four years: Each halving reduces the annual issuance rate by 50%. The last Bitcoin is expected to be mined around the year 2140.

After the halving in 2024, the annual inflation rate of Bitcoin will drop below 1%, making it scarcer than gold.

The Stock-to-Flow (S2F) model, proposed by analyst PlanB, has gained widespread attention for its ability to predict Bitcoin price trends during halving cycles. This model is based on the ratio of the existing stock of an asset to its annual production.

Stock: The total amount of existing assets.

Flow: The amount produced each year.

S2F = Stock /