Bitcoin Price History

4 Quick Questions & Answers ...

Q.   What was Bitcoin's Price When Trading First Started?
A.   In July 2010 Bitcoin started trading at about $0.0008 to $0.08 per Bitcoin.

Q.   What was Bitcoin's Price in 2009?
A.   The value of 1 Bitcoin was $0 when first introduced in 2009.

Q.   What's the Highest Price Bitcoin Has Reached?
A.   On 14th April 2021 Bitcoin reached a price of $63'440.

Q.   What Will Bitcoin Be Worth in 2030?
A.   Predictions vary depending on who is making the estimate. According to Jeremy Liew of Lightspeed Venture Partners, Bitcoin could reach $500,000 by 2030 and according to the Crypto Research Report of June 2020, the cryptocurrency could exceed $397'000.

Bitcoin Price History in More Detail ...

When looking at all asset classes it's clear that Bitcoin has so far had one of the most volatile trading histories.

Bitcoin's first price increase was in 2010 when the price of one Bitcoin increased from about $0.0008 to $0.08.

Since then it has undergone several crashes and rallies and some folks have compared the cryptocurrency and its price changes to the "Beanie Babies" fashion during the 1980's. Others have compared Bitcoin price history to the 17th century "Dutch Tulip Mania" bubble.

Bitcoin's price variations reflect alternating investor enthusiasm and dissatisfaction. Bitcoin’s anonymous inventor, Satoshi Nakamoto, designed Bitcoin as a medium for daily transactions as well as for circumventing traditional banking systems following the 2008 financial collapse.

Although Bitcoin hasn't as yet gained mainstream acceptance as a day-to-day currency, it has begun to be increasingly accepted as a hedge against inflation and as a store of value.

Past price fluctuations were largely caused by traders and retail investors gambling on a price that appeared to be "ever-increasing" without properly considering reason or previous facts.

Crypto Currency Converter Cryptocurrency Prices by Coinlib

But Bitcoin's price situation has recently evolved as a result of some institutional investors beginning to invest due to maturing cryptocurrency markets as well as state regulators creating new rules specifically for crypto currencies.

So while the Bitcoin price remains very volatile, it is now a result of a considerably wider range of factors rather than being influenced primarily by speculators seeking fast profits.

In the last several years Bitcoin investors have mostly had to contend with a very bumpy road with frequent daily volatility of +/- 10% or more.

Investors have also needed to grapple with other challenging issues in the crypto currency system such as fraudsters and scams combined with a lack of regulations.

In spite of this there were periods when Bitcoin's price volatility exceeded all expectations, resulting in considerable price bubbles.

The first Bitcoin price bubble was in 2011 when its price jumped from $1 in April all the way up to $32 in June -- a gain of 3200% in only 3 months.

That increase was swiftly followed by a sharp fall in crypto markets with Bitcoin's price tumbling down to only $2 in November 2011. In 2012 the price improved, rising from $4.80 in May up to $13.20 by mid August.

In 2013 Bitcoin's price started trading at $13.40 and underwent two price bubbles -- the first happened at the beginning of April when the price skyrocketed to $220 but crashed back down to $70 by mid-April.

This was followed by another rally in October 2013 when the price increased from $123.20 to spike at $1156.10 in December, only to fall steeply to about $760 just three days later.

Bitcoin's 5th price bubble happened in 2017 -- it was standing at around $1000 at year start, then for about two months the price declined followed by a surprising climb from $975.70 on 25th March all the way to $20,089 on 17th December 2017.

The 2017 price streak helped place Bitcoin firmly in the mainstream news spotlight with governments and economists in several countries taking notice and beginning to develop digital currencies to compete with Bitcoin.

In June 2019 the price exceeded $10,000 but fell back by December of that year to $7,112.73.

Bitcoin's price burst into activity again in 2020 when the world's economy was shut down by the Covid 19 pandemic and investors' fears about the global economy accelerated Bitcoin's rise. The cryptocurrency started 2020 at $7,200 and by November Bitcoin was trading for $18,353.

Government stimulus checks amplified inflation concerns with a potentially weakening purchasing power of the US Dollar as well as significant government money printing helping to support the narrative of Bitcoin as a store of value, given that its supply is limited to 21 million.

This narrative attracted larger institutions rather than smaller retail investors, who had largely been responsible for the 2017 price increases.

Continued institutional interest propelled its price further upwards and Bitcoin's price reached just below $24'000 in December 2020, representing an increase of 224% since the beginning of 2020.

Less than a month later Bitcoin broke its previous price record and exceeded $40,000 in January 2021.

At its new peak the cryptocurrency was selling at $41'528 on 8th January 2021 but just 3 days later the price had dropped to $30'525.

Bitcoin Price History Analysis

Bitcoin’s price has so far often followed the classic Gartner Hype Cycle of peaks and troughs due, on one side, to hype about the crypto's potential and troughs of disillusionment, on the other, which led to crashes.

In the cycle’s structure, speculative bubbles provide funding to drive a new technology’s evolution. Each up and down in Bitcoin's price has provided a spotlight on Bitcoin's shortcomings and a fresh infusion of funds from investors to develop its continuing infrastructure.

Earlier Bitcoin price analyses pointed out that its price was a function of its velocity or its use as a currency for daily trading transactions. But trading volumes of crypto represent just a small fraction of their mainstream currency counterparts and Bitcoin has never yet taken off as a medium for daily transactions.

This is due partly to the fact that the focus surrounding Bitcoin has altered from being a currency to being a store of value where people buy and hold Bitcoin for long time periods rather than using it for trading.

What Factors Influenced Early Bitcoin Trading?

In Bitcoin’s early years there was little liquidity and cryptocurrency investors were very few. This resulted in wide price swings when those relateively few investors booked profits or when a negative industry development, e.g. a threatened ban on cryptocurrency exchanges, was reported.

The rise and fall of cryptocurrency exchanges controlling considerable amounts of Bitcoin also influenced Bitcoin's price changes.

In 2014, events at one of the world’s first crypto exchanges, Mt. Gox, contributed significantly to sudden changes in Bitcoin's price. In December 2013 rumors were circulating of lax security and poor management at Mt. Gox which caused a drop of 29% in its price.

Then the price fell 32% from $850 to $580 after Mt. Gox claimed to have lost 850'000 Bitcoins due to hackers and consequently filed for bankruptcy in February 2014.

Another factor which affected Bitcoin's price in its early days was acceptance from mainstream online retailers -- its price exceeded $1'000 in January 2014 following online retailer Overstock announcing that it would start accepting Bitcoin for customer purchases.

What Factors Influence the Bitcoin Price?

In recent years the factors affecting Bitcoin price has changed significantly. When Bitcoin started attracting mainstream attention in 2017, government regulators have had an important impact on its price and, depending on whether it is positive or negative news, each government announcement results in increases or decreases in Bitcoin's price.

Crypto Prices Cryptocurrency Prices by Coinlib

Institutional investors have also cast a shadow over Bitcoin's price. For about the last ten years Bitcoin has become increasingly attractive to institutional investors. This has brought more liquidity into the Bitcoin system and tends to reduce volatility somewhat.

Bitcoin's 2020 rally happened following several respected names in finance speaking in favour of its potential as a store of value against inflation following significantly increased government spending during the Covid-19 pandemic. Bitcoin's treasury management by companies also contributed to strengthening its price in 2020.

MicroStrategy Inc. (MSTR) and Square Inc. (SQ) both announced commitments to using Bitcoin rather than cash as a part of their corporate treasuries.

A third influence on Bitcoin's price has been industrial developments in tech and finance. E.g. Announcements in 2017 concerning the launch of Bitcoin futures trading on the Chicago Mercantile Exchange (CME) and the Cboe options exchange (Cboe) were greeted with a price increase on crypto exchanges and helped nudge Bitcoin's price nearer to the $20,000 mark.

Bitcoin routine and periodic halving events, when the total available market supply of Bitcoin declines caused by a reduction in miners' rewards because of a programmed algorithmic change, have also influenced price increases.

The Bitcoin price since May 2020 halving event caused an increase of almost 300%. Previous halving events in 2012 and 2016 produced significantly larger price increases of 8,000% and 600% respectively.

Economic instability has also influenced Bitcoin price changes because Bitcoin, with to its inherent limited availability, was originally devised as a global hedge against inflation, economic instability and government or central bank controlled fiat currencies.

Countries like Venezuela and Iran, which have experienced hyper-inflation in their currencies, have seen significant increase in Bitcoin use for transactions as well as for storing wealth. This suggests that the cryptocurrency’s price changes are in part related to global economic turmoil.

E.g. Chinese government announcements concerning capital controls were usually accompanied by a Bitcoin price increase. The shutdown caused by the 2020 Covid-19 pandemic produced global macro-economic instability and galvanized Bitcoin's price with significant increases.

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