Bitcoin Investment Guide: How to Build a Robust Strategy Amid Extreme Risks

Opening Reflection

Whenever the crypto market declines, the question “Will Bitcoin eventually disappear?” often trends on social media. As the largest digital asset by market cap, BTC is praised as “digital gold” but also surrounded by doubts of “bubbles” and “zeroing out.” However, the way this question is posed itself is problematic—rather than guessing the endgame, it’s more important to understand what investors should do in the present.

Why is the perception of BTC’s value always ambiguous?

In traditional finance, we value stocks based on corporate profits and bonds based on fixed interest payments. But Bitcoin is different—it has no underlying company profits or bond interest commitments. This leads many traditional analysts to conclude directly: if it can’t be valued, it has no value.

However, this reasoning has a fundamental flaw. Bitcoin’s value doesn’t come from cash flows but from its decentralized network’s tamper-proof features, strict issuance cap, and the consensus accumulated by global users. As long as these three foundational conditions remain, Bitcoin transcends mere speculation.

In simple terms, just as in internet culture where abbreviations like “sol” remain popular because enough people understand and use them, Bitcoin’s value logic is similarly based on broad network consensus rather than a single authoritative price.

Can BTC really head toward zero? Three hypothetical scenarios

Technical dimension: Can the network be destroyed?

In theory, if Bitcoin’s network suffers a sustained fatal attack that completely disables transaction verification, its security foundation would collapse. But how far are we from that?

Over a decade of stable operation, the distributed hash power across tens of thousands of nodes worldwide, and the high cost of attack—billions of dollars—are all protective barriers. Moreover, the Bitcoin protocol itself has upgrade capabilities, and past soft and hard forks have been smoothly integrated. So far, no technical event has emerged that could substantially destroy its security.

Policy dimension: Is a global ban possible?

Suppose all major economies simultaneously ban BTC trading, holdings, and mining, and enforce strict law enforcement over the long term—this would cause a devastating impact on prices. But this scenario is highly unlikely to be realized.

In reality, regulation is fragmented and dynamic, not uniform. Most countries choose to incorporate Bitcoin into their regulatory frameworks, establish compliance rules, and issue risk warnings rather than outright bans. For investors, regulatory risks are worth noting but should be incorporated as foreseeable risk factors into investment decisions, not seen as an existential threat.

Market dimension: Will liquidity exhaustion lead to permanent zeroing?

In high leverage and highly emotional environments, liquidity drying up can indeed trigger terrifying crashes. There have been many such moments in history. But the key point is—these are often cyclical phenomena, not permanent value evaporation.

After each extreme decline, the market gradually regains its pricing ability. A sharp price drop does not equate to the project’s death, and this distinction is crucial for long-term investors.

Practical investor responses: starting from risk management

Rather than philosophical debates about “will it zero out,” it’s better to prepare through three concrete measures.

First: Position discipline

What truly causes investors to lose everything is not wrong direction but uncontrolled sizing. Even the most accurate judgment can turn disastrous when over-leveraged. Set a maximum loss limit you can tolerate (e.g., 5% or 10% of total assets) and stick to it—this is the most direct risk management tool.

Second: Dollar-cost averaging to reduce emotional interference

The core value of DCA (regular fixed-amount investing) isn’t hitting the lowest point but automating execution to avoid emotional trading. When markets are extremely panicked, rational investors find it hard to buy; but DCA forces you to do so. For highly volatile assets, this “forced rationality” often yields the greatest returns.

Third: Long-term erosion from trading costs

Fees, slippage, withdrawal costs—these seemingly small numbers can eat up 20%-40% of returns over ten years. Especially for DCA investors or frequent traders, choosing a platform with transparent fee structures and ample liquidity can significantly improve long-term performance.

Practical conclusion

In theory, Bitcoin isn’t necessarily “guaranteed to survive” or “certain to zero out.” It carries tail risks, but only if multiple extreme conditions occur simultaneously.

In reality, the more common scenario is that BTC experiences cyclical high volatility and deep retracements, but each time it recovers its valuation. This characteristic means the challenge for investors isn’t “whether to bet everything,” but “how to build a sustainable, low-cost investment system amid uncertainty.”

Frequently Asked Questions

Q: Will the worst-case scenario for BTC really happen?
A: Theoretically possible, but it would require simultaneous technical, policy, and market disasters—extremely unlikely in practice.

Q: What is the most common mistake investors make in a bear market?
A: Over-leveraging, holding too much, lacking stop-loss strategies, and ignoring the compounded impact of long-term trading costs.

Q: Should beginners build a position all at once or gradually?
A: Most beginners are better off gradually accumulating while strictly limiting overall position size.

Q: How to judge if a trading platform is trustworthy?
A: Look for proof of reserves, trading depth, transparent fee structures, and ease of deposits and withdrawals—assess comprehensively.

Risk Warning: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies are highly volatile and risky; please conduct independent research and make cautious decisions based on your risk tolerance.