Bitcoin has had a long history since its launch at the beginning of 2009 by the pseudo-anonymous Satoshi Nakamoto. As an asset, Bitcoin has had one of the most volatile prices and trading histories in the cryptocurrency ecosystem. The cryptocurrency has gone through several stunning rallies and unprecedented crashes. This article will take a comprehensive look at Bitcoin’s price history, from its humble beginnings to its stunning 2017 and 2021 rallies and everything in between.
Key Points
- Bitcoin was introduced in 2009 and is known for its extreme volatility.
- Initially intended to be a means to facilitate transactions, Bitcoin has found increasing use as a store of value and a hedge against inflation during times of market uncertainty.
- Several factors influence the price of Bitcoin as an asset class, with increased interest from investors, governments, and institutions fueling its growth.
Bitcoin’s Price History: An Introduction
If we look at Bitcoin’s price history on a chart, we will see several peaks and valleys across its history. These price changes are a reflection of investor enthusiasm for the cryptocurrency. Bitcoin’s creator, the pseudo-anonymous Satoshi Nakamoto, intended it to be used as a medium of exchange and as an alternative to the traditional financial system in the wake of the 2008 financial crisis.
Bitcoin began gaining traction as a medium of exchange, initially flourishing in a niche community. Slowly, it began drawing investors’ attention, building a reputation as a store of value and a hedge against inflation. Several institutions also jumped on the Bitcoin bandwagon, creating special Bitcoin investment instruments. Bitcoin’s price fluctuations stem from investors betting on its price increases, anticipating significant profits. Let’s go through Bitcoin’s price history.
The Early Years: What Was Bitcoins Starting Price?
At its launch, Bitcoin’s value was next to nothing. The first transaction that gave the cryptocurrency any monetary value was conducted in October 2009, when computer science student Martti Malmi, who was extremely involved with Bitcoin during its early stages, transferred 5050 BTC to another user for just over $5 via PayPal. While it would still take nearly a year to attract a sizable following, this transaction proved that BTC could be used in place of real money.
BTC’s growth during its early years was slow, considering there was minimal infrastructure in place to support its growth and only a few enthusiasts working on the cryptocurrency. The first “real world” Bitcoin transaction occurred in May 2010, when Florida native Laszlo Hanyecz ordered two pizzas from Papa John’s for 10,000 BTC. The cryptocurrency’s first significant jump in price came on the 17th of July, 2010, when it rose to $0.9. The price continued to increase over the next couple of months, reaching $1 on the 13th of April, 2011, then surging to nearly $30 by the 7th of June, 2011, representing an increase of almost 3000%.
However, following this initial high, the fledgling cryptocurrency markets fell considerably, and by mid-November, the Bitcoin price was down to $2.05. 2012 saw some price movement as BTC embarked on another upward trend, reaching $13.50 by August.
Consolidating, Pushing Past $1000, And Mt. Gox
While 2012 remained relatively uneventful for Bitcoin, 2013 saw considerable price movement and saw Bitcoin’s first sustained bull run. The cryptocurrency began the year trading at a modest $13.28 and reached $230 by April before rapidly declining and dropping to $68 by July. However, by early October, Bitcoin’s price started to increase once again, as the price surged past $1000 by December. However, this was short-lived as the price crashed once more.
2014 saw Bitcoin’s price drop as the Mt. Gox exchange, which was handling 70% of all Bitcoin transactions, experienced a crippling security breach that saw the loss of 850,000 BTC. The Mt. Gox incident shook investor confidence in BTC and also adversely impacted investor sentiment towards crypto on a significant scale. By the start of 2015, Bitcoin’s price had dropped to around $315.
First Bull Run
In 2016, Bitcoin gradually began its upward trajectory, rising to $900 by the end of the year. By February 2017, the price had again broken past the $1000 mark. However, there was no crash this time, and Bitcoin embarked on a staggering bull run. By May, the price had crossed $2000 and then surged past the $5000 mark in October. The $10,000 mark was crossed at the beginning of December as BTC continued to push higher. Bitcoin’s 2016-2017 bull run peaked just short of the $20,000 mark, as the price surged from $10,000 to $19,475 by the end of December.
This was when mainstream investors, governments, institutions, and economists began taking notice of Bitcoin. Suddenly, Bitcoin saw a wave of interest from investors and institutions as companies began investing in BTC. Its reputation as a store of value and hedge against inflation was solidified. The price remained relatively stable in 2018-2019, although the price had dropped with small bursts of activity. Still, the price had dropped below $10,000 by February 2018, and by the end of 2019, the price was hovering around $6600.
COVID-19 And Second Surge
2020 saw the COVID-19 pandemic take hold, and with businesses and economies shutting down, Bitcoin burst into life again. Bitcoin’s latest bull run would see the cryptocurrency surge to unprecedented levels. At the start of 2020, Bitcoin’s price was close to $7000. However, the pandemic and subsequent economic fallout led to negative sentiment among investors and contributed to Bitcoin’s stunning growth. By October 2020, the price moved past the $10,000 mark and was trading at $19,157 by November. It rose further to $29,000 by December 2020, representing an increase of over 400% since the beginning of the year.
By January 2021, Bitcoin had smashed its previous all-time high and surged past $40,000. BTC continued to push higher as the pandemic pushed more investors and institutional interest toward the cryptocurrency, leading to Bitcoin reaching a peak price of $63,558 on the 12th of April 2021. However, as summer set in, Bitcoin’s price dropped over 50%, dropping below $30,000 by the 19th of July. The price was back in the bullish territory by September, climbing back above $50,000 before dropping back to $40,000 two weeks later.
Bitcoin’s price began climbing again in October, pushing past $60,000 in October, and reaching its all-time high of $68,789 in November before dropping back to $60,000 by the end of November. After reaching its all-time high and nearly crossing the $70,000 mark, Bitcoin’s price began to experience considerable volatility as concerns around inflation began to take hold. The emergence of a new, fast-spreading variant of COVID-19, the Omicron, also spooked markets. As a result, Bitcoin’s price started to decline gradually at the start of 2022. By the end of March, the price had dropped to $47,000 and continued to drop. By May, the price had fallen to $28,000, marking the first time the asset had dropped below $30,000 since July 2021. Bitcoin’s price continued to plummet, dropping below $23,000 for the first time since December 2020.
Crypto Winter
With inflation rising, Bitcoin and the rest of the markets have struggled. With the US Federal Reserve hiking interest rates to reign in runaway inflation, we have seen its impact on Bitcoin, which has been in freefall due to the crypto winter. The most damaging month for the cryptocurrency was May 2022, when the price dropped to $20,000. The markets remained choppy as potential investors shied away from risky investments, and it was only a matter of time before BTC dropped below the $20,000 mark. Bitcoin’s price is currently hovering around the $16,500 mark as the asset looks to navigate the crypto winter.
What Was Bitcoin’s Starting Price? In Closing
As you can see, Bitcoin has had phases of extreme volatility coupled with periods of relative calm. It started with a small community of supporters and has become the world’s largest and most popular cryptocurrency. So what does the future hold? With the current uncertainty prevailing in the markets, we may see seasoned investors pick up Bitcoin at relatively lower prices in the hopes of another bull run.
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