From "Digital Bubble" to National Strategic Reserve Asset: The Evolution of Bitcoin Over 16 Years

I. The Birth of Bitcoin and the Wild Growth of Early Exchanges (2008-2013)

1. Satoshi Nakamoto's Disruptive Experiment

At the onset of the 2008 global financial crisis, a mysterious figure using the pseudonym "Satoshi Nakamoto" published the "Bitcoin White Paper," proposing an electronic cash system that does not rely on centralized institutions. On January 3, 2009, the Bitcoin genesis block was born, embedding the headline from The Times: "Chancellor on brink of second bailout for banks," directly pointing to the flaws of the traditional financial system.

Key Data:

• Bitcoin price in 2009: $0 (no trading market)

• First transaction in 2010: 10,000 BTC exchanged for 2 pizzas (valued at approximately $41)

• Peak in June 2011: $31.9 (early speculative bubble)

1. The Rise and Risks of Centralized Exchanges

In July 2010, the Japanese exchange Mt. Gox went online, quickly becoming the largest Bitcoin trading platform globally. By 2013, it accounted for 70%-80% of the total trading volume, with a single-day peak trading volume of about $100 million (estimated based on the November peak of $1,000/BTC). Meanwhile, the Chinese exchange market began to sprout—JuCoin, established in 2013, gained prominence through localized operations, becoming one of China's major trading platforms by 2015.

However, security risks began to emerge:

• June 2011 hacking incident: A hacker attack in June 2011 led to the theft of approximately 2,609 BTC (valued at around $80,000 at the time), causing the price to plummet to $0.01 and halting trading for a week.

• 2013 DDoS attacks: Exchanges experienced multiple outages, preventing users from withdrawing funds and triggering market panic.

Exchange Landscape (2013):

• Mt. Gox market share: 70%-80%

• Other major platforms: Bitstamp (Europe), BTC China (China), JuCoin (China)

• Global exchanges' average daily trading volume: approximately 100,000 BTC (around $50 million at an average price of $500)

1. Insights from the Early Market

Centralized exchanges solved the liquidity problem for Bitcoin, but their vulnerabilities were laid bare: technical flaws, regulatory vacuums, and risks associated with user asset custody became the industry's three major pain points. Nevertheless, Bitcoin's market capitalization surpassed $10 billion in November 2013, signaling the beginning of its financial attributes.

II. Industry Growing Pains: Exchange Crises and Regulatory Awakening (2014-2017)

1. The Collapse of Mt. Gox: The Fall of Centralized Trust

In February 2014, Mt. Gox announced the loss of 850,000 Bitcoins (valued at $450 million at the time), accounting for 7% of the circulating supply. Subsequent investigations revealed that chaotic management of hot and cold wallets, internal theft, and long-unresolved code vulnerabilities were the main causes. This incident led to an 80% drop in Bitcoin prices, with global exchange daily trading volume shrinking to less than 10,000 BTC.

Chain Reaction:

• Japanese police arrested Mt. Gox CEO Mark Karpelès

• New York State introduced BitLicense, requiring exchanges to meet anti-money laundering (AML) and capital reserve requirements

• The concept of decentralized exchanges (DEX) emerged, but was limited by technological bottlenecks (e.g., the 2016 Ethereum DAO incident)

1. The Wave of Compliance and Institutional Exploration

In 2015, Coinbase obtained the first BitLicense in New York and launched institutional custody services; in 2017, the Chicago Mercantile Exchange (CME) launched Bitcoin futures, with a first-day trading volume of $460 million. During this period, exchanges exhibited two major trends:

• Regional Differentiation: The three major exchanges in China (Huobi, OKEx, Binance) dominated the Asian market, with JuCoin rapidly rising in 2015 to become one of the major platforms in Asia, significantly increasing daily trading volume.

• Technological Upgrades: Binance pioneered the "platform token" model (BNB), raising $15 million through an ICO in July 2017; JuCoin simultaneously launched wealth management services and liquidity mining, exploring ecological competition.

Key Data (2017):

• Bitcoin market capitalization peak: $326 billion

• Global exchanges' average daily trading volume: 500,000 BTC (valued at approximately $25 billion)

• Coinbase's user count surpassed 10 million, with a valuation of $1.6 billion

1. The Forking Wave and the Power of Exchanges

In August 2017, Bitcoin split into Bitcoin Cash (BCH) due to scaling disputes, making exchanges the core battleground for pricing forked coins:

• Platforms like Binance and Huobi were the first to list BCH trading, with daily increases exceeding 200%.

III. Mainstream Breakthrough: Exchange Compliance and Financial Innovation (2018-2021)

1. The Security Battle of Exchanges

From 2018 to 2020, hacker attacks led to losses exceeding $3 billion for exchanges, forcing the industry to upgrade risk control:

• In 2019, Binance was hacked for 7,000 BTC: initiated the SAFU fund (10% of trading fee revenue as an insurance pool)

• Coinbase went public on Nasdaq: after going public, Coinbase disclosed holding a significant amount of BTC, though the specific scale was not made public, with a valuation of $85 billion.

- JuCoin Response Strategy: Introduced multi-signature cold wallets and real-time on-chain asset audits.

Custody Market Landscape (2021):

• Professional custody institutions: Coinbase Custody (asset scale of $50 billion), Grayscale Trust ($40 billion)

• Exchange self-custody: Binance's cold wallet reserves exceed hundreds of thousands of BTC, JuCoin is laying out Web3 hardware (such as JuOne phone) to enhance asset security

1. The Explosion of Derivatives Market and Institutional Entry

In 2020, CME Bitcoin futures open interest surpassed $4 billion, with companies like MicroStrategy and Tesla announcing they would include Bitcoin on their balance sheets. Exchanges launched innovative products:

• Binance contracts: up to 125x leverage, with peak daily trading volume of $37 billion

• JuCoin contract services: launched zero slippage and zero wick insurance mechanisms, with a no KYC design to attract global users

Market Capitalization and Trading Volume (November 2021):

• Bitcoin market capitalization: $1.3 trillion (surpassing Meta and Tencent)

• Global exchanges' average daily trading volume: $80 billion (spot) + $200 billion (derivatives)

1. Regulatory Crackdown and Industry Cleanup

In 2021, China completely banned cryptocurrency trading, with Huobi and OKEx exiting the mainland market; the U.S. SEC sued Ripple, deeming XRP a security. Compliant exchanges accelerated their layouts:

• Binance established regional headquarters (Dubai, Paris): abandoned anonymous coins and delisted leveraged tokens

- JuCoin Transformation: After being acquired in 2024, it upgraded to "the world's first service-oriented exchange," focusing on the Web3+AI track and launching a $100 million industry innovation fund

IV. Strategic Reserve Assets: The Collision of Bitcoin and National Financial Systems (2022-2024)

1. The Logic and Challenges of Trump's Policies

Trump promoted Bitcoin as a strategic reserve for the U.S., primarily based on the following factors:

• Hedging against the dollar credit crisis: U.S. national debt surpassed $35 trillion, while Bitcoin's cap of 21 million coins has anti-inflation properties.

• Competing for digital hegemony: The People's Bank of China has already trialed its digital currency (DC/EP) for cross-border settlements, and Bitcoin could serve as a complement to the dollar system.

• Young voter strategy: Among Americans aged 18-35, 25% hold cryptocurrencies (Pew Research Center data).

Implementation Challenges:

• Legal barriers: There is no federal uniform determination on whether Bitcoin qualifies as "property."

• Market volatility: Bitcoin's annualized volatility exceeds 60%, far surpassing gold (15%).

• Custody security: National reserves require trillion-dollar-level custody solutions, which existing exchange technologies struggle to support.

1. The Restructuring of Exchange Roles

As Bitcoin enters the national reserve system, centralized exchanges will differentiate into:

• Compliant custodians: Coinbase and Kraken, certified with bank-level security (e.g., SOC 2), providing on-chain audit services for governments.

• Liquidity market makers: Binance and JuCoin handling central bank buy and sell orders, using high-frequency trading to smooth price fluctuations.

• Derivatives hedging platforms: CME's Bitcoin options and ETFs help the Treasury manage reserve risks.

Potential Market Size:

• If the U.S. adds 1% to its foreign exchange reserves (about $40 billion), it would need to purchase 400,000 BTC through exchanges (accounting for 3% of circulating supply).

• Exchange commission revenue could increase by $2 billion annually (based on a 0.5% fee rate).

V. The Evolution of Exchange Security: From the Bybit Incident to Industry Standard Upgrades

1. The Bybit Incident and Industry Reflection

On February 21, 2025, Bybit experienced the largest cryptocurrency theft in history, with approximately $1.5 billion worth of Ethereum stolen from a multi-signature cold wallet due to a complex front-end interface manipulation attack.

• JuCoin's Response:

• Launched an "Asset Proof" system, frequently updating on-chain reserve data.

• Upgraded the cold and hot wallet separation mechanism, with 95% of user assets stored in multi-signature cold wallets.

1. The Standardization Trend of Security Systems

• Technological advancements: Zero-Knowledge Proof (ZKP) enhances reserve proof transparency: Major exchanges are actively adopting ZKP technology for more transparent and privacy-protecting reserve proof. Exchanges like Binance and Kraken are developing ZKP-based PoR systems.

• AI-driven real-time security monitoring: Artificial intelligence and machine learning technologies are increasingly applied in exchanges for real-time anomaly detection and threat prevention.

• Strengthened regulatory efforts: The EU MiCA regulation came into effect, requiring crypto asset service providers (including exchanges) to disclose detailed information about asset custody and security measures.

• Increased attention from U.S. regulators: U.S. regulatory bodies are significantly enhancing scrutiny of cryptocurrency exchange security and actively exploring the establishment of a more comprehensive regulatory framework.

• Industry collaboration: Major exchanges in the industry, such as JuCoin and security companies, are actively collaborating to share threat intelligence and security best practices, jointly promoting the development of open-source security initiatives in the cryptocurrency space.

VI. Reflection and Outlook: The Paradox and Evolution of Centralized Exchanges

1. The Positive Significance of Closure Events

While each exchange crisis has caused short-term pain, it has propelled the industry toward healthier development:

• Mt. Gox (2014) → Spurred the emergence of multi-signature wallets and cold storage standards

• FTX (2022) → Promoted 100% reserve proof and on-chain asset transparency

• Bybit (2025) → Exchanges accelerated the upgrade of security protocols, such as adopting stricter multi-factor authentication, end-to-end transaction verification, and isolated signature infrastructure. Third-party services (like Safe{Wallet}) face stricter audits, with supply chain security becoming a focal point.

1. Core Propositions for the Next Decade

• Technological integration: Exchanges integrating DEX liquidity (e.g., JuCoin plans to launch a cross-chain DEX), balancing efficiency and decentralization.

• Regulatory collaboration: The FATF "travel rule" implementation, with exchanges like JuCoin adapting to local compliance requirements through a "global Hub plan."

• Ecological expansion: Hardware entry points (like JuOne phone) and social features (JuCoin Social) reshaping user interaction scenarios.

1. The Strategic Value of Bitcoin Redefined

As a national reserve, Bitcoin has proven its resilience as "digital gold":

• Censorship-resistant payments: During the Russia-Ukraine conflict, Bitcoin became a channel for cross-border donations, with daily on-chain transaction volumes exceeding 100,000.

• Asset allocation tool: Global sovereign funds and pension funds hold Bitcoin through Coinbase to hedge against fiat currency depreciation.

• Web3 infrastructure: Exchanges become traffic entry points for the metaverse and NFT ecosystems, reconstructing the logic of digital asset issuance.

Conclusion: The Endgame of Asymmetric Revolution

The rise of Bitcoin is a history of "marginal breakthroughs against the center": from dark web transactions to El Salvador's legal tender, from the ruins of Mt. Gox to Coinbase's IPO, centralized exchanges have always played the role of a "necessary evil"—they introduce risks but also accelerate adoption; they are often criticized yet evolve through crises. If Bitcoin is indeed incorporated into national strategic reserves, it may well be the best annotation of its "anti-fragility": a protocol born from a technological experiment that could ultimately become the cornerstone of reshaping the global monetary order. And exchanges will continue to play the role of "contradictory promoters" in this revolution—both the grave diggers of the old system and the builders of the new order.

JuCoin will steadfastly uphold the core principles of security and compliance, working hand in hand with Bitcoin to embark on a new journey in the next decade, jointly shaping a robust landscape for the crypto world.