Bitcoin has one of the most turbulent trading histories among asset classes. The value of a single bitcoin increased significantly for the first time in the cryptocurrency's history in 2010, rising from a little fraction of a penny to $0.09.
Since it became accessible, the cryptocurrency has had numerous rallies and falls. This article explains Bitcoin's volatility and outlines some of the factors that influence its price movement.
Key Takeaway
- Bitcoin's trading history has been erratic and unpredictable ever since it was first introduced.
- Bitcoin is a class of assets that is still developing, just like the variables that affect its price.
- Bitcoin was created to be used as money in everyday exchanges.
- Investors have used Bitcoin to hold wealth, protect against inflation, and hedging against market instability even if it is still a cryptocurrency.
- Around 2017, additional cryptocurrencies started to appear as a result of the increased interest that governments, economists, and investors have in Bitcoin.
Bitcoin's Price History
Investor elation and discontentment with Bitcoin's promise are reflected in price swings. The unknown creator(s) of Bitcoin created it with everyday transactions in mind.
The use of cryptocurrency as a medium of exchange has become more widespread. Additionally, it drew traders who started to wager against its price changes. Bitcoin became popular among investors as a means of wealth creation, value storage, and inflation insurance. Institutions have been developing Bitcoin investment products.
The main causes of Bitcoin price variations are bets made by traders and investors that anticipate financial gain from an ever-increasing price. But the pricing narrative for Bitcoin has once more changed. In January 2022, Bitcoin's momentum started to wane.
Here's a quick rundown of Bitcoin's price history:
2009/2015
When it was first released in 2009, Bitcoin was priced at zero. As of July 17, 2010, it cost $.09, an increase.
On April 13, 2011, Bitcoin's price increased once more from $1 to a high of $29.60 on June 7, 2011, a gain of 2,960% in just three months.
Following a severe downturn in the cryptocurrency markets, Bitcoin's price peaked by mid-November at $2.05.
The price increased the next year from $4.85 on May 9 to $13.50 by August 15.
In general, 2012 was a quiet year for Bitcoin, but 2013 saw significant price increases. The price of bitcoin peaked on April 8 at $230 after starting the year at $13.28. Its price then dropped equally quickly, down to $68.50 on July 4 after a few weeks.
Early in October 2013, the price of one bitcoin was $123. It reached a peak of $1,237.55 in December before plummeting to $687.02 three days later.
2014 saw a decline in the price of bitcoin, which peaked at $315.21 at the beginning of 2015.
2016/2020
Over the course of 2016, prices gradually increased to over $900.
Bitcoin's price in 2017 fluctuated about $1,000 before breaking $2,000 in mid-May. It then soared to $19,345.49 on December 15.
The attention of mainstream investors, politicians, economists, and scientists led to the creation of rival cryptocurrencies to Bitcoin.
In 2018 and 2019, the price of bitcoin fluctuated in short bursts. For instance, the price increased and the trading volume increased in June 2019, when the price reached $10,000. By mid-December, it had dropped to $6,635.84, though.
In 2020, the COVID-19 pandemic caused the economy to collapse. The price of Bitcoin erupted once more. At the beginning of the year, bitcoin was worth $6,965.72. Bitcoin's growth was exacerbated by the pandemic shutdown and the ensuing government initiatives that fueled investors' concerns about the state of the world economy.
At the close on Nov. 23, Bitcoin was trading for $19,157.16. Bitcoin's price reached just under $29,000 in December 2020, increasing 416% from the start of that year.
2021- Present
By exceeding $40,000 on January 7, 2021, Bitcoin broke its previous price record set in 2020 in less than a month. By the middle of April, as a cryptocurrency exchange called Coinbase went public, Bitcoin prices had risen to fresh all-time highs of over $60,000.
Bitcoin's price continued to rise due to institutional interest, reaching a peak of $63,558 on April 12, 2021.
Prices fell by 50% by the summer of 2021, reaching $29,796 on July 19. Another bull run occurred in September, pushing prices as high as $52,693 until a significant decline brought it to a closing price of $40,710 roughly two weeks later.
Bitcoin again hit a record high on November 10, 2021, rising to $68,789 before falling to $64,995.
Midway through December 2021, Bitcoin dropped to $46,164. As inflation concerns and the advent of a new COVID-19 variation, Omicron, continued to worry investors, the price began to fluctuate significantly.
Bitcoin's closing prices barely reached $47,445 by the end of March before dropping even more to $28,305 on May 11 during the period from January to May 2022. Since July 2021, Bitcoin had not closed below $30,000 until today. Cryptocurrency prices fell on June 13. For the first time since December 2020, the price of bitcoin fell below $23,000.
By the end of 2022, Bitcoin had plunged below $20,000 since the "crypto winter" started in November 202
Fast fact
Interestingly, Bitcoin's price trends appeared to mimic those of the stock market from November 2021 through June 2022, suggesting that the market was treating it like a stock.
What Affects the Price of Bitcoin?
Supply and Demand
Bitcoin and other cryptocurrencies' prices are influenced by perceived value, supply, and demand, just like traditional currencies, goods, or services inside a nation or economy.
People will acquire Bitcoin if they think it is worth a certain amount, especially if they feel its value will rise.
Only 21 million Bitcoins will ever be produced by design.
As long as demand stays the same or rises, the closer Bitcoin comes to its limit, the more expensive it will become.
Software and gear used for bitcoin mining produce them at a predetermined rate. Every four years, this pace divides in half, slowing the production of coins.
As long as Bitcoin's popularity continues to increase and its supply cannot keep up with demand, its price should rise. In contrast, there will be more supply than demand if popularity declines and demand declines. The price of Bitcoin should thereafter decrease unless it continues to hold its worth for other reasons.
Fast fact
Economic circumstances can affect Bitcoin's price, as demonstrated during the COVID-19 pandemic.
New Bitcoin Securities
Supply and demand are another aspect that has an impact on the price of Bitcoin. Bitcoin developed become a tool for storing value and generating profits for investors and financial organizations. As a result, investors have produced and traded derivatives. This affects the price of bitcoin.
Because demand will grow and decrease with investor attitude, speculation, investment product hype, irrational exuberance, and investor panic and terror can also be anticipated to have an impact on Bitcoin's price.
Cryptocurrency Competition
The value of other cryptocurrencies might also impact Bitcoin. Numerous cryptocurrencies exist, and more do so when issues are addressed and they are accepted as legitimate means of payment and currency by institutions, retailers, and regulators.
Last but not least, demand will decline and prices will follow if investors and consumers think that other coins will prove to be more valuable than Bitcoin. Alternatively, if attitude and trading change in the opposite direction, demand will increase along with prices.
Is Bitcoin a Good Investment?
A cryptocurrency called bitcoin is made to be a means of exchange. It was also used as an investment by traders and investors, although its price is extremely unstable. Financial risk is significantly increased as a result of this. Before purchasing Bitcoin as an investment, it is advisable to discuss your situation and aspirations with a seasoned financial advisor.
What Is Bitcoin's All-Time High Price?
On November 8, 2021, the price of bitcoin reached an all-time high of $67,566.83.
What Was Bitcoin's Cheapest Price?
In July 2010, Bitcoin started trading at $.09.
How Long Does It Take to Mine One Bitcoin?
Changes in difficulty level. The time it takes to find a block depends on the software and hardware being utilized as well as the energy resources available, but it typically takes ten minutes.
Disclaimer
This post is not an advice by Biloo_Tips or the author to invest in cryptocurrencies or any Initial Coin Offerings (ICOs), as doing so is extremely dangerous and speculative. Before making any financial decisions, it is always advisable to get the advice of a knowledgeable specialist because every person's circumstance is different. No guarantees or claims are made by Biloo_Tips regarding the timeliness or accuracy of the material provided here.