By Larry Wright
Bitcoin is a digital currency that is intended to function as a means of exchange. It’s similar to the internet equivalent of cash. You may use Bitcoin to purchase goods and services the same way you use conventional money.
Instead of depending on a central authority to oversee its production and administration, bitcoin makes use of cryptography to maintain control over its creation. The development of bitcoin began with the conception and deployment of the cryptocurrency by a completely anonymous person, Satoshi Nakamoto, who incorporated many existing concepts from the Cypherpunk movement into the new currency’s design.
Several digital currency systems existed before the introduction of bitcoin, all of which were constructed upon the e-cash protocols established by David Chaum and Stefan Brands. Bitcoin is the most recent of these technologies. Two cryptographers named Cynthia Dwork and Moni Naor brought forth the idea of addressing and solving complex arithmetical brainteasers to earn some benefits. Several years later, Adam Back discovered the same concept, which he applied to the development of hashcash, a proof-of-work system for spam suppression that was introduced in 1997.
Reverting back to Bitcoin, the cryptocurrency’s trading historical background has been bumpy and turbulent since first launched. Bitcoin’s price has fluctuated dramatically over the course of its brief existence. Indeed, over the course of years, bitcoin has experienced significant growth, and it has now established itself as a substantial monetary system both online and offline. Several enterprises started accepting bitcoin as a substitute for traditional economies starting around the middle of the last decade.
The asset class of Bitcoin is constantly evolving, as are the variables that impact its price. However, although it is still a virtual currency, the story of bitcoin has changed—it now serves as an investment vehicle that allows investors to obtain exposure to cryptocurrencies while simultaneously providing a means to hold wealth and protect against inflation and market volatility.
Bitcoin Price Changes at a Glance
When Satoshi Nakamoto created bitcoin, he intended for it to be used as a medium for everyday transactions and as a means of evading traditional banking infrastructures after the 2008 economic meltdown. Bitcoin is a decentralized cryptocurrency that is transmitted through a peer-to-peer network, allowing individuals and companies to avoid the need of traditional banking institutions.
Since then, virtual currency has acquired widespread acceptance as a commerce method and has enticed speculators who make bets against the coin’s price movements. It has also evolved into a novel form of investment—a mechanism to hold money and protect against deflation.
The tale of Bitcoin’s price has evolved in recent years. Investment firms are beginning to enter the cryptocurrency markets as the sector advances, and government regulators are developing laws that are specially tailored to their needs. Despite the fact that Bitcoin’s price continues to fluctuate, it is now considered an official member of the formal sector rather than an investment tool for traders seeking rapid gains.
Since its inception 12 years ago, the price of bitcoin has been on a rollercoaster ride. Over the long run, however, its cost has been steadily increasing, accumulating at a rate of around 100 percent to 200 percent every year. Initial Bitcoin investors who have hung on to their investments have often achieved spectacular returns. Of course, previous success is not a reliable predictor of future outcomes.
However, although some people like drawing comparisons between Bitcoin’s past price graph and other speculative cultural trends such as Beanie Babies or tulip bulbs, speculation is just one of the dozen factors to consider while depicting Bitcoin’s future market trends.
However, over the decades, a trend has evolved in the historical price of Bitcoin that has shown to be rather dependable. Approximately each four years, this blockchain technology experiences a transition known as “the halving,” in which the number of new cryptocurrency coins awarded to miners is reduced by half. This has occurred at least three times thus far. The first Bitcoin halving took place in 2012, the second in 2016, and the third in 2020.
Bitcoin achieved new all-time highs the year after each halving occurrence, setting new records in the process. Then, roughly 18 months after the market’s value was halved, a bear market came to the forefront. Following a period of stabilization, the price of Bitcoin began to rise once again in expectation of the next split, marking the dawn of a long bullish trend in cryptocurrency.
In this section, we will examine the price history of Bitcoin, the most well-known cryptocurrency in the world. From 2009 until the present, we will examine how its pricing has evolved. We’d discover how much this technology has increased in price in the past, how much it is now increasing in price, as well as what the future has in store.
Bitcoin Pricing History
2009
Satoshi Nakamoto released the Bitcoin white paper on October 31, 2008. An innovative peer-to-peer digital currency system based on the new kind of blockchain technology was described in this research article.
Later, on January 3, 2009, the Bitcoin community was officially launched. The genesis block was the first to be mined, enabling the first set of transactions to be recorded on a blockchain, establishing the first Bitcoin transaction history. A paragraph written on this block said, ” Chancellor on the brink of Second Bailout for Banks.” This referenced a paper, published by The London Times which was released when financial institutions got billions as bailout cash from banks and other financial institutions during the financial crisis that lasted between 2008 and 2009.
Bitcoin is the first digital money, with a limited quantity of 21 million units. Because of this, some people refer to it as “digital gold.” Bitcoins, like gold, must be “mined” rather than being generated out of thin air, as is the case with fiat currencies. Mining is the process of answering rigorous math problems with the help of computational power. As a reward for efforts and successfully solving a complex algorithm, the machines and the miner that does this function are given freshly minted bitcoins.
However, the price of bitcoin in 2009 was hardly more than a penny over zero. Because it was something absolutely new to the financial market, investors and traders were utterly uninterested in it, and many were outright hostile to it. Investors were under the impression that bitcoin was a fragile financial asset that might vanish into thin air at any time, and as a result, only a small amount of money was invested in bitcoin throughout 2009. Fortunately, things were going to take a drastic turn for the better very shortly.
2011
In 2009, the price of bitcoin was only a hair over zero dollars. About two years later, a legitimate Bitcoin implementation started to take form, and for the first time, considerable growth in the value of Bitcoin could be seen. For a brief period of time in 2011, the Electronic Frontier Foundation (EFF) accepted Bitcoin as a form of donation but quickly withdrew its endorsement due to the lack of regulation controlling cryptocurrency transactions at the time.
Bitcoin (BTC) reached parity with the United States dollar for the first time in February 2011, when its value crossed $1.00 for the first time. Months later, the value of a bitcoin on the Mt. Gox exchange platform dropped below $10 before skyrocketing to $30 in a matter of hours. From its $0.30 starting point at the beginning of the year, Bitcoin’s value has climbed by a factor of one hundred.
By the end of the year, the price of bitcoin had plummeted below $5 per bitcoin unit. It’s impossible to say for definite why the price behaved in the manner it did, especially at a time when the invention was still at an early stage of development.
2012
When the Bitcoin Foundation was founded in September 2012, it had the purpose of “accelerating the international spread of bitcoin via standardization, conservation, and promotion of open-source technology,” which it accomplished really well. Gavin Andresen, Peter Vessenes, and Jon Matonis were amongst few of the founding members of this platform.
WordPress started accepting bitcoin payments in November 2012, and the currency has been rising in popularity since then.
2013
In 2013, the EFF resumed taking Bitcoin, followed by many other brands officially accepting bitcoin as a payment method. Indeed, the year 2013 was the most profitable year in the existence of the cryptocurrency in terms of its relative growth compared to the last year. The cryptocurrency recorded increases of 6,600 percent in the last year alone.
Starting around $13 at the commencement of the year, bitcoin prices soared to over $250 in April until reversing course and falling by more than 50%. The price remained stable for around six months until undergoing another historic boom in November and December of the same year, when the value reached a high of $1,100. During this bull run, Bitcoin’s market valuation surpassed $1 billion U.S dollars. That’s a significant milestone! In addition, the world’s inaugural Bitcoin ATM was established in Vancouver, enabling users to change their cash into digital currencies.
2014
Zynga said in January 2014 that it was investigating the use of bitcoin for the purchase of in-game items in 7 of its franchises. Following suit, the D Las Vegas Casino as well as Golden Gate Hotel & Casino, both located in downtown Las Vegas, declared that they will begin accepting bitcoins in the same month, per a piece written by USA Today. According to the story, the money would be recognized at five places, that includes the front counter of the hotel and a few of other restaurants’ establishments. Soon after this, TigerDirect and Overstock.com have both begun taking bitcoin as payment too.
Mt. Gox, one of the world’s major cryptocurrency exchanges, temporarily halted payments in February 2014, claiming technical glitches. With rumors swirling that around 744,000 bitcoins were robbed, Mt. Gox declared bankruptcy in Japan at the end of next month and was forced to close its doors. However, it should be noted that the fame of Mt. Gox began fading months back before it went bankrupt, as customers were experiencing difficulty withdrawing their monies.
In July 2014, Newegg and Dell began taking bitcoin as a form of payment.
A bitcoin price-based over-the-the-counter swap item was approved by the Commodity Futures Trading Commission (“CFTC”) in September 2014. The authorization of the CFTC exchange product was again a milestone to highlight, as it was the very first time that a regulatory entity in the United States approved BTC monetary item.
Microsoft started accepting bitcoin for the purchase of Xbox games & Windows applications in December of 2014. Additionally, other light-hearted bitcoin-themed compositions, such as “Ode to Satoshi,” were published the same year to coincide with the events mentioned above. To add on, a documentary film titled “The Rise & Rise of Bitcoin” was released, which included interviews with cryptocurrency users such as software engineers and so forth.
2015
When Coinbase secured US$75 million in a Series C investment round in January 2015, it shattered the record set for a bitcoin business earlier. Following the collapse of Mt. Gox, the United Kingdom-based bitcoin exchange, Bitstamp officially confirmed that their platform would be unavailable while they investigated a key factor that contributed to the theft of approximately 19,000 BTC (equivalent to nearly US$5 million at the time) from their hot wallet. Because of widespread suspicion that clients’ monies had been misplaced, the marketplace was forced to go down for many days. On January 9, Bitstamp commenced trading after beefing up security precautions and guaranteeing consumers that their financial statements will not be affected again.
Merchants that accepted bitcoin surpassed 100,000 in February 2015, according to data from CoinDesk.
2016
Japanese authorities recognized virtual currencies such as bitcoin as possessing a purpose comparable to that of real money in March 2016. Bidorbuy, the biggest online marketplace in South Africa, likewise accepted bitcoin payments from all market participants alike.
The findings of a report released in July 2016 showed that, by November 2013, the bitcoin trade was no longer being operated by “sin” operations but rather by respectable and trustworthy businesses. However, in August 2016, a prominent payment gateway, Bitfinex, was hijacked, with almost 120,000 bitcoins (equivalent to around $60 million) being taken.
When the Swiss Railway operator SBB (CFF) modernized all of their computerized ticket offices in November 2016, it enabled users of the ticket machines to purchase bitcoin from them by scanning the unique identifier on either a phone app or the ticketing machine’s sensor.
With each passing year, bitcoin created increasing academic attention; the ultimate number of Google Scholar papers produced referencing bitcoin began manifesting; from 83 in 2009 to 424 in 2012 and 3580 in 2016, remarkable progress was noted.
2017
In January of this year, the Bitcoin price surpassed $1,100, setting a new all-time high and accomplishing a new milestone. Within a few months, the price had risen to approximately $20,000. That is a 20x increase in less than a year.
One of the distinguishing characteristics of this period was that the common public started becoming more conscious of cryptocurrencies for the first moment ever. Mainstream media sources started to cover articles on Cryptocurrencies such as bitcoin as they become available. Nevertheless, opinions on Bitcoin varied from considering it to be a fraud to believing it to be the greatest invention since the invention of the wheel.
This was the time when bitcoin actually gained popularity amongst the common public, rather than being restricted to top investors only. With mass media being flooded heavily with crypto-related information, familiarity with this virtual tool started increasing.
2018
On January 22, 2018, South Korea implemented legislation that compels all bitcoin dealers to reveal their identities, thereby prohibiting anonymous bitcoin transactions. The regulation was effective immediately. Payment processor Stripe stated its intention to discontinue accepting bitcoin payments by the end of April 2018, blaming declining interest, increasing prices, and increased transaction delays.
2021-Present
The biggest bitcoin festival in history took place in Miami in June 2021, with an estimated 15,000 bitcoin fans who participated. El Salvador’s President, Nayib Bukele, declared on June 1, 2021, that his nation would become the world’s first government to recognize bitcoin as legal cash.
Bitcoin set a new all-time high of $67,549.14 on November 7, 2021, bringing the total value of the cryptocurrency to $67,549.14. During the first few days of December 2021, Bitcoin sank to $49,243.39 before spiking higher as investors were increasingly concerned about inflation, which coincided with the appearance of a new form of COVID-19, known as Omicron.
Conclusion
There have been multiple surges and collapses in the bitcoin since it was first made available for use. For long-term bitcoin speculators, the rewards from Bitcoin would outperform those from most other investment vehicles if it continues to increase at even a quarter of the rate at which it has done so over the previous 12 years. BTC is even projected to surpass the $100,000 threshold in the not-too-distant future. However, nothing can be predicted with certainty.