Bitcoin breaks through $100,000 to reach a new high: Is it too late to enter now for value investing?
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Bitcoin breaks through $100,000 to reach a new high: Is it too late to enter now for value investing?
You may never be able to perfectly time the bottom.
Navigating Web3 tides with focused insightsAuthor: Daii
Translation: Baihua Blockchain
Yesterday, Bitcoin's price surged past the $110,000 mark, igniting market enthusiasm and flooding social media with cheers declaring "the bull market is back." Yet for investors who hesitated at $76,000 and missed their entry opportunity, this moment feels more like an internal reckoning: Have I missed it again? Should I have bought decisively during the pullback? Will there still be opportunities ahead?
This leads us to our core discussion: in an asset known for extreme volatility like Bitcoin, does a "value investing" perspective truly exist? Can this strategy—seemingly at odds with its "high-risk, high-volatility" nature—capture "asymmetric" opportunities within this turbulent game?
In investing, asymmetry refers to situations where potential gains vastly exceed potential losses, or vice versa. At first glance, this hardly seems characteristic of Bitcoin. After all, most people perceive Bitcoin as either a path to overnight riches or total ruin.
Yet beneath this polarized perception lies an overlooked possibility: within Bitcoin’s cyclical deep downturns, value investing methods may create highly attractive risk-reward structures.
Looking back at Bitcoin's history, it has repeatedly plunged 80% or even 90% from its peaks. During these moments, markets are shrouded in panic and despair, capitulation selling drives prices seemingly back to zero. But for investors deeply understanding Bitcoin’s long-term logic, these represent classic "asymmetric" opportunities—risking limited losses for potentially enormous returns.
Such opportunities are rare. They test an investor’s level of insight, emotional control, and conviction to hold long-term. This raises a more fundamental question: Do we have reason to believe Bitcoin truly possesses "intrinsic value"? If so, how can we quantify and understand it, and use that to shape investment strategies?
In what follows, we’ll embark on this journey: uncovering the deeper logic behind Bitcoin’s price swings, illuminating the glimmers of asymmetry amid bloodbaths, and exploring how principles of value investing can be reborn in the decentralized era.
But first, you need to understand one thing: asymmetric opportunities in Bitcoin investing have never been scarce—in fact, they are abundant.
Why Does Bitcoin Offer So Many Asymmetric Opportunities?
If you browse Twitter today, you’ll see overwhelming celebration of the Bitcoin bull run. With prices breaking $110,000, many across social media declare the market forever belongs to prophets and the lucky few.
But if you look back, you’ll realize the invitation to this feast was actually sent during the market’s most desperate moments—only most lacked the courage to open it.
Historical Asymmetric Opportunities
Bitcoin’s growth has never followed a straight upward curve. Its historical script intertwines extreme fear with irrational euphoria. Behind every deep downturn lie highly attractive "asymmetric opportunities"—where your maximum loss is limited, but your potential return could be exponential.
Let’s travel through time, letting data speak.
2011: -94%, falling from $33 to $2
This was Bitcoin’s first moment of “widespread recognition,” when its price rocketed from a few dollars to $33 within half a year. But soon after, the crash came. Bitcoin plummeted to $2, a 94% drop.
Imagine the despair then: major geek forums turned desolate, developers fled, even core Bitcoin contributors expressed doubts about the project’s future on forums.
But if you had “taken a gamble” then, investing $1,000, years later when Bitcoin surpassed $10,000, your holdings would have been worth $5 million.
2013–2015: -86%, Mt.Gox Collapse
By late 2013, Bitcoin’s price first breached $1,000, capturing global attention. But the good times didn’t last. In early 2014, the world’s largest Bitcoin exchange, Mt.Gox, declared bankruptcy, with 850,000 Bitcoins vanishing from the blockchain.
Overnight, media consensus: “Bitcoin is dead.” CNBC, BBC, and The New York Times all ran front-page stories on the Mt.Gox scandal. Bitcoin’s price fell from $1,160 to $150—a drop exceeding 86%.
But what happened next? By the end of 2017, that same Bitcoin reached $20,000.
2017–2018: -83%, ICO Bubble Bursts
The above chart comes from a New York Times report on this market crash. The red box highlights a comment from an investor stating his portfolio lost 70% of its value.
2017 was the “year of mass speculation,” when Bitcoin entered public consciousness. Countless ICO projects emerged, whitepapers filled with words like “disrupt,” “restructure,” and “decentralized future,” and the entire market went wild.
But when the tide receded, Bitcoin dropped from its all-time high near $20,000 to $3,200—a decline over 83%. That year, Wall Street analysts mocked: “Blockchain is a joke”; the SEC filed multiple lawsuits; retail investors were liquidated and left the market, forums fell silent.
2021–2022: -77%, Industry “Black Swan” Events Cascade
In 2021, Bitcoin wrote a new legend: breaking $69,000 per coin, drawing in institutions, funds, nations, and retail investors alike.
But just a year later, Bitcoin crashed to $15,500. Luna collapsed, Three Arrows Capital was liquidated, FTX imploded… consecutive “black swan” events toppled confidence across the crypto market like dominoes. The Fear & Greed Index once plunged to 6 (extreme fear), and on-chain activity nearly froze.
The image above comes from a May 12, 2022 article in The New York Times, showing simultaneous crashes in Bitcoin, Ethereum, and UST. We now realize that behind UST’s collapse was a “pump-and-dump” scheme orchestrated by Galaxy Digital and Luna, which significantly accelerated UST’s downfall.
Yet by the end of 2023, Bitcoin quietly rebounded to $40,000; after ETF approval in 2024, it soared further to today’s $90,000.
Sources of Bitcoin’s Asymmetric Opportunities
We’ve seen that Bitcoin repeatedly staged stunning comebacks from seemingly catastrophic moments in history. So the question arises—why? Why does this high-risk asset, often ridiculed as a “greater fool” game, repeatedly rise after crashing? More importantly, why does it offer such strong asymmetric investment opportunities to patient, knowledgeable investors?
The answer lies in three core mechanisms:
Mechanism One: Deep Cycles + Extreme Emotions Cause Price Deviations
Bitcoin is the world’s only 24/7 open free market. No circuit breakers, no market makers for protection, no Federal Reserve backstop. This means it amplifies human emotional swings far more than any other asset.
In bull markets, FOMO (fear of missing out) dominates, retail investors chase prices higher, narratives soar, valuations become severely inflated; in bear markets, FUD (fear, uncertainty, doubt) floods the networks, calls to “sell low” echo everywhere, prices get trampled into the dirt.
This emotionally amplified cycle causes Bitcoin to frequently enter states of “severe price deviation from true value.” And this is precisely fertile ground where value investors seek asymmetric opportunities.
In short: in the short term, the market is a voting machine; in the long term, it’s a weighing machine. Bitcoin’s asymmetric opportunities appear in the moments before the weighing machine kicks in.
Mechanism Two: Extreme Price Volatility, But Extremely Low Risk of Death
If Bitcoin were truly the “could go to zero anytime” asset that media sensationalizes, it would indeed have no investment value. But in reality, it has survived every crisis—and emerged stronger.
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In 2011, after dropping to $2, the Bitcoin network continued operating normally.
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In 2014, after Mt.Gox collapsed, new exchanges quickly filled the void, and user numbers kept growing.
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In 2022, after FTX’s bankruptcy, the Bitcoin blockchain continued generating a new block every 10 minutes, uninterrupted.
Bitcoin’s underlying infrastructure has almost no downtime history. Its system resilience far exceeds most people’s understanding.
In other words, even if the price halves again and again, as long as Bitcoin’s technological foundation and network effects remain, there is no real risk of going to zero. We have an extremely attractive structure: limited downside risk in the short term, unlimited upside potential in the long term.
This is asymmetry.
Mechanism Three: Intrinsic Value Exists but Is Overlooked, Leading to “Oversold” States
Many believe Bitcoin has no intrinsic value, thus its price can fall indefinitely. This view ignores several key facts:
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Bitcoin has algorithmic scarcity (a hard cap of 21 million coins, enforced by the halving mechanism);
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It is secured by the world’s most powerful Proof-of-Work (PoW) network, with quantifiable production costs;
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It benefits from strong network effects: over 50 million addresses hold non-zero balances, transaction volume and hash rate hit record highs;
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It has gained recognition from mainstream institutions and even sovereign states as a “reserve asset” (ETFs, legal tender status, corporate balance sheets).
This leads to the most controversial yet crucial question: Does Bitcoin have intrinsic value? If so, how do we define, model, and measure it?
Can Bitcoin Go to Zero?
Possibly—but the probability is extremely low. One website recorded 430 times Bitcoin was declared “dead” by the media.
Yet beneath this death counter is a small note: if you had bought $100 worth of Bitcoin each time it was declared dead, today your holdings would be worth over $96.8 million.
You must understand: Bitcoin’s underlying system has run stably for over a decade with almost no downtime. Whether it’s the Mt.Gox collapse, Luna’s failure, or the FTX scandal, its blockchain has consistently generated a new block every 10 minutes. This technical resilience provides a powerful survival floor.
Now you should see that Bitcoin isn’t “baseless speculation.” On the contrary, its asymmetric potential stands out precisely because its long-term value logic exists—yet is frequently severely underestimated by market emotions.
This brings up the next fundamental question: Can Bitcoin, with no cash flows, no board of directors, no factories, and no dividends, really be an object of value investing?
Can You Practice Value Investing in Bitcoin?
Bitcoin is infamous for its extreme price volatility. People swing wildly between greed and fear. So how can such an asset fit into “value investing”?
On one side are Benjamin Graham and Warren Buffett’s classic value investing principles—the “margin of safety” and “discounted cash flow.” On the other is Bitcoin—a digital commodity with no board, no dividends, no earnings, not even a legal entity. Under traditional value investing frameworks, Bitcoin seems to have no place.
The real question is: How do you define value?
If we move 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 not only fits value investing, but may 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 what you buy, but whether you buy it at a price below its value.”
In other words, value investing isn't limited to stocks, companies, or traditional assets. As long as something has intrinsic value and its market price temporarily falls below that value, it becomes a valid target for value investing.
But this leads to a more critical question: if we can’t use traditional metrics like P/E or P/B ratios to estimate Bitcoin’s value, where does its intrinsic value come from?
While Bitcoin lacks financial statements like a company, it is far from valueless. It possesses a fully analyzable, modelable, and quantifiable value system. Though these “value signals” aren’t packaged into quarterly reports like stocks, they are equally real—and possibly even more consistent.
We will explore Bitcoin’s intrinsic value from two key dimensions: supply and demand.
Supply Side: Scarcity and Programmed Deflation Model (Stock-to-Flow Ratio)
The core of Bitcoin’s value proposition lies in its verifiable scarcity.
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Fixed total supply: 21 million coins, hard-coded and unchangeable.
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Halving every four years: each halving cuts annual issuance by 50%. The last Bitcoin is expected to be mined around 2140.
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After the 2024 halving, Bitcoin’s annual inflation rate will drop below 1%, making it scarcer than gold.
The Stock-to-Flow (S2F) model, proposed by analyst PlanB, gained widespread attention for its ability to predict Bitcoin price trends during halving cycles. The model is based on the ratio of an asset’s existing stock to its annual production flow.
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Stock: total existing amount of the asset.
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Flow: newly produced amount per year.
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S2F = Stock / Flow
A higher S2F ratio indicates relative scarcity and theoretically higher value. For example, gold has a high S2F ratio (around 60), supporting its role as a store of value. Bitcoin’s S2F ratio steadily increases with each halving:
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2012 halving: price surged from around $12 to over $1,000 within a year.
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2016 halving: price climbed from around $600 to nearly $20,000 within 18 months.
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2020 halving: price rose from around $8,000 to $69,000 within 18 months.
Will the fourth halving in 2024 continue this trend? My view is: yes, but the surge may weaken.
Note: The vertical axis on the left uses a logarithmic scale, helpful for visualizing early trends. A jump from 1 to 10 takes the same space as from 10 to 100, making exponential growth easier to interpret.
The model draws inspiration from valuation logic for precious metals like gold and silver. Its premise is:
The higher the S2F ratio, the lower the asset’s inflation, and the greater the theoretical value it can hold.
In May 2020, after the third halving, Bitcoin’s S2F ratio rose to about 56, nearly matching gold’s. The keywords of the S2F model are scarcity and deflation—it algorithmically ensures Bitcoin’s supply decreases annually, boosting its long-term value.
Of course, no model is perfect. The S2F model has a key weakness: it considers only supply, completely ignoring demand. This might have worked before 2020, when Bitcoin adoption was limited. But since 2020—when institutional capital, global narratives, and regulatory dynamics entered the market—demand has become the dominant driver.
Therefore, to form a complete valuation framework, we must turn to the demand side.
Demand Side: Network Effects and Metcalfe’s Law
If S2F locks the “supply valve,” then network effects determine how high the “water level” can rise. The most intuitive indicators here are on-chain activity and user base expansion.
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By end of 2024, Bitcoin had over 50 million addresses with non-zero balances.
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In February 2025, daily active addresses rebounded to about 910,000, a three-month high.
According to Metcalfe’s Law—the network’s value is roughly proportional to the square of the number of users (V ≈ k × N²)—we can understand:
Doubling the user count could theoretically quadruple the network value.
This explains why Bitcoin often exhibits “jump-style” value growth after major adoption events.
Again, the image of Metcalfe joyfully admiring Bitcoin is a fictional AI-generated depiction.
Three core demand indicators:
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Active addresses: reflect short-term usage intensity.
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Non-zero addresses: indicate long-term penetration. Despite bear markets, the annual compound growth rate over the past seven years has been around 12%.
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Value-bearing layer: Lightning Network capacity and off-chain payment volumes continue rising, indicating real-world adoption beyond mere “holding.”
This “N²-driven + sticky user base” model implies two forces:
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Positive feedback loop: more users → deeper transactions → richer ecosystem → more value. This explains why events like ETF launches, cross-border payments, or emerging market integration often trigger nonlinear price surges.
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Negative feedback risk: if global regulation tightens, new technologies emerge (e.g., CBDCs, Layer-2 alternatives), or liquidity dries up, user activity and adoption may shrink—causing value to contract with N².
Thus, only by combining S2F (supply) and network effects (demand) can we build a robust valuation framework:
When the S2F signal indicates long-term scarcity, and active users / non-zero addresses maintain an upward trend, the mismatch between demand and supply amplifies asymmetry.
Conversely, if user activity declines—even with fixed scarcity—price and value may fall together.
In other words: scarcity ensures Bitcoin won’t depreciate, but network effects are key to its appreciation.
Notably, Bitcoin was once mocked as a “geek toy” or “symbol of speculative bubbles.” But today, its value narrative has quietly undergone a fundamental shift.
Since 2020, MicroStrategy has added Bitcoin to its balance sheet, currently holding 538,000 BTC. Global asset management giants like BlackRock and Fidelity have launched spot Bitcoin ETFs, bringing in billions in incremental capital. Morgan Stanley and Goldman Sachs have begun offering Bitcoin investment services to high-net-worth clients. Even countries like El Salvador have adopted Bitcoin as legal tender. These changes aren’t just capital inflows—they represent endorsements of legitimacy and institutional consensus.
Conclusion
In Bitcoin’s valuation framework, supply and demand are never isolated variables—they intertwine to form the double helix of asymmetric opportunity.
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On one hand, the S2F model, based on algorithmic deflation, mathematically outlines how scarcity enhances long-term value.
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On the other, network effects measured through on-chain data and user growth reveal Bitcoin’s real-world demand base as a digital network.
Within this structure, the disconnect between price and value becomes more apparent—this is exactly where value investors find golden windows. When fear grips the market and prices fall below levels suggested by comprehensive valuation models, asymmetry quietly opens the door.
Is the Essence of Value Investing Simply Finding Asymmetry?
The core of value investing isn’t merely “buying cheap.” It rests on a more fundamental logic: finding a structure where risks are limited but potential returns are substantial, within the gap between price and value.
This is precisely what distinguishes value investing from trend following, momentum trading, or speculative gambling.
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Trend investing relies on market inertia;
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Momentum trading bets on short-term volatility;
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Value investing requires patience and rationality—intervening when emotion and fundamentals severely diverge, assessing long-term value, and buying when price is far below value—then waiting for reality to catch up.
Its effectiveness lies in building a natural asymmetric structure: the worst-case outcome is a controllable loss, while the best-case scenario could exceed expectations many times over.
If we examine value investing more deeply, we find it’s not a set of techniques, but a mindset—a structural logic based on probability and imbalance.
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Investors analyze “margin of safety” to assess downside risk.
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They study “intrinsic value” to determine the likelihood and extent of mean reversion.
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They choose “patient holding,” because asymmetric returns often require time to materialize.
All of this isn’t about making perfect predictions. It’s about structuring a bet: when you’re right, you win far more than you lose when wrong. This is precisely the definition of asymmetric investing.
Many mistakenly think value investing is conservative, slow, and low-volatility. In reality, the true essence of value investing isn’t earning less or taking less risk—it’s pursuing disproportionately huge returns with controllable risk.
Whether early shareholders of Amazon or Bitcoin geeks quietly accumulating during crypto winters, their core action is the same:
When most underestimate an asset’s future, and its price is driven to rock bottom by emotion, regulation, or misinformation—they step in.
From this perspective:
Value investing isn’t an outdated strategy of “buy low, collect dividends.” It’s a universal language for all investors seeking asymmetric return structures.
It emphasizes not just cognitive ability, but emotional discipline, risk awareness, and above all—a belief in time.
It doesn’t require you to be the smartest person in the room. It only asks that you stay calm when others panic, and place your bets when others exit.
Thus, once you truly grasp the deep connection between value investing and asymmetry, you’ll understand why Bitcoin—despite its unfamiliar form—can be embraced by serious value investors.
Its volatility isn’t your enemy—it’s your gift.
Its panic isn’t your risk—it’s market mispricing.
Its asymmetry isn’t gambling—it’s a rare chance to reprice undervalued assets.
True value investors don’t shout during bull markets. They quietly position themselves in the calm beneath the storm.
Summary
Bitcoin isn’t an escape-from-reality gambling table—it’s a footnote helping you reinterpret reality.
In this uncertain world, we often mistake safety for stability, risk avoidance, and lack of volatility. But true safety has never been about dodging risk—it’s about understanding it, mastering it, and seeing buried value foundations when everyone else flees.
This is the true essence of value investing: finding asymmetric structures based on insight and mispricing; quietly accumulating the market’s forgotten chips at cycle bottoms.
And Bitcoin—an asset born from code-enforced scarcity, evolving value through networks, repeatedly reborn in fear—may be the purest expression of asymmetry in our time.
Its price may never be calm. But its logic remains firm:
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Scarcity is the floor
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Network is the ceiling
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Volatility is opportunity
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Time is leverage
You may never perfectly time the bottom. But you can traverse cycles again and again—buying misunderstood value at reasonable prices.
Not because you’re smarter than others—but because you’ve learned to think across dimensions: you believe the best bet isn’t placed on price charts—but on the side of time.
So remember:
Those who bet in the depths of irrationality are often the most rational. And time—is asymmetry’s most loyal executor.
This game always belongs to those who can read order behind chaos, truth behind collapse. Because the world doesn’t reward emotion—the world rewards understanding. And understanding, ultimately—is always proven right by time.
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