Since its inception, Bitcoin has been the talk of the town for its high volatility and decentralized nature. As the first and most popular cryptocurrency, Bitcoin has seen a lot of highs and lows so far.
With a market capitalization of $672.23 billion, Bitcoin stands tall as the most valuable currency on the internet. In this blog, we will look at Bitcoin’s price history and understand why it fluctuates the way it does.
In August 2008, the domain name bitcoin.org was secretly registered. Two months later, on 31st October, a whitepaper was published by Satoshi Nakamoto, the anonymous Bitcoin creator. It was the first time the idea of a virtual currency was introduced.
Later, in January 2009, Nakamoto released the Bitcoin software as an open-source code. Bitcoin was developed to become a peer-to-peer electronic cash system that is decentralized, uninflatable, and completely anonymous. It was looked upon as an alternative to fiat money.
Initially, Bitcoin’s value was next to nothing.
Bitcoin was valued for the first time in October 2009 when Martti Malmi, a Finnish computer science student popularly known as Sirius, sold 5,050 coins for just $5.02. At this point, each Bitcoin was worth $0.0009.
Despite so many dedicated crypto exchanges in the market, the first ever Bitcoin transaction was conducted on PayPal. Let’s look at Bitcoin’s price in its initial years.
Bitcoin’s adoption was slow when it was first introduced. During this period, only a few hobbyists used Bitcoin either for fun or out of curiosity.
The first-ever “real-world” Bitcoin transaction was conducted in May 2010 via the Bitcoin forum. Laszlo Hanyecz, from Florida, exchanged 10,000 Bitcoins for two Papa John’s pizzas, which were delivered to him by Jeremy Sturdivant.
Back then, the pizzas were worth approximately $41, which brought down the price of each Bitcoin to $0.0041. Those pizzas are worth $200 million today, that’s about $12.4 million per slice. That was certainly the most expensive pizza order of this century.
Later, in October 2010, Bitcoin’s price reached $0.1 and increased to $0.3 by the end of the year. Over time, Bitcoin started gaining popularity. In 2011, its value grew to $1 for the first time, and by June, its price broke another high of $29.6 per Bitcoin. While this looked like a good start, it didn’t last long. By the end of the year 2011, Bitcoin’s price dropped to $4.7.
The following year, 2012, Bitcoin saw only a few ups and downs and closed at $13.
Bitcoin started shifting gears in 2013. A lot of exchanges started supporting Bitcoin transactions. As a result, more and more users started using Bitcoins by the end of 2014.
In 2013, Bitcoin’s price saw a huge jump from $13 at the beginning of the year to a whopping $1000 by November 2013.
The following year, Bitcoin’s price again crashed to $300 by December after the Tokyo-based Mt. Gox, a Bitcoin exchange platform, experienced a security breach. Hackers stole 850,000 bitcoin (BTC) — now worth over $29 billion. This hack disrupted consumers’ trust in Bitcoin, which caused its price to struggle during 2015 and 2016. With all the ups and downs, Bitcoin closed at $1000 by the end of 2016.
2017 turned out to be a good year for Bitcoin. Its price rose from $1000 in January 2017 to $2000 in May and was doubled to $4000 by August. Later the same year, Bitcoin’s price skyrocketed to $19,345 on December 16, 2017.
From here on, Bitcoin started to get the attention it deserved. More and more consumers and giant investment firms started buying Bitcoins.
During 2018 and 2019, Bitcoin’s price saw huge fluctuations. For instance, its price came down from $17,172 on January 6th, 2018, to $3,709 by 31st December. However, it quickly rose to $12,252 by July 2019 and closed at $7,196 by December.
During these years, Bitcoin gained a lot of popularity due to its highly volatile nature. Several users started mining Bitcoins and using them for trading goods and services. Some people bought Bitcoin as a hedge against inflation or as virtual gold.
In 2020, the COVID-19 pandemic shut down the economy, and the stocks plummeted. Bitcoin, too, suffered due to the pandemic and lost almost 50% of its value in just a week. It came down from $9,134 on 6th March to $4,826 in just 6 days.
Critics speculated this to be the end of Bitcoin. Little did they know, this was just the beginning. When governments around the world started printing more money to combat the pandemic, inflation grew rapidly. Bitcoin was the only currency that could not be printed at will. It got everyone’s attention. Bitcoin grew from $4000 in March to $10,000 in May. That’s more than double!
It didn’t stop there.
By December 2020, Bitcoin’s price shot up to $28,949 and was bound to increase exponentially from here on. At this point, Bitcoin’s market cap was $539 billion.
As more and more users started investing in Bitcoin, its price grew rapidly from $50,000 in February 2021 to $60,000 in March and an all-time high nearing $69,000 by November 2021.
Later, in December 2021, Bitcoin’s price dropped to $46,164 due to the emergence of new COVID-19 variants. It continued to drop even in 2022, reaching almost $28,000 in May. By the end of the year, its price dropped further to $20,000.
So far, 2023 has been good for Bitcoin. In the beginning, its price was approximately $16,000, which has consistently increased throughout the year. As of writing this, one Bitcoin is worth $34,000. Its price has been influenced by several factors, including an increase in adoption, lenient regulations, and the possibility of Bitcoin ETF being approved by the US SEC.
Learn more: What Determines the Price of Bitcoin?
Since its inception, Bitcoin has grown by 13,113.70%. In 2013, one Bitcoin was worth $13.3. With $1000, you could buy 75 Bitcoins back in 2013. As of October 3, 2023, Bitcoin trades for $34,200.
This means 75 Bitcoins would be worth $2.5 million today, assuming that you didn’t spend any Bitcoins for 10 years.
If anything, Bitcoin is very unpredictable. Being the oldest and most popular cryptocurrency, it has seen a lot of peaks. However, every time, it has retreated significantly and has taken years to rise to its previous highs.
Can Bitcoin reach $100,000 this year? Sure, it can reach $100,000 in just a few months or even sooner. But it is as likely to drop to $10,000 or even less than that. Thus, if you buy Bitcoin or are seeking to invest in it, know that it is highly volatile and unpredictable.
Despite being highly volatile, Bitcoin is still the only currency that is private, fully decentralized, globally accessible, and highly secure. If you are a business, enabling Bitcoin payments will open up untapped opportunities for scaling up your empire.
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Compare fiat with Bitcoins and explore the benefits of accepting Bitcoin payments. Learn how to enable Bitcoin transactions on your platform for free with Speed.
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Learn how you can trade your Bitcoins for gold. Both are used as a reliable store of value and can be a hedge against inflation.
The choice between Bitcoin and gold as investments hinges on factors like risk tolerance, investment strategy, available capital, and the capacity to endure potential losses. The decision is subjective and should align with individual financial preferences and goals.