Bitcoin has been extremely volatile in value since it was first introduced, but surprisingly it remains one of the most favorable assets to own. The first recorded surge in price came in 2010 when a single bitcoin was valued at $0.09 from just a fraction of a penny which was a huge increase in percentage terms. Since then, bitcoin has experienced rapid price surges and falls but the overall trajectory is clearly upward.
Bitcoin was originally invented by Satoshi Nakamoto to be used as a medium of exchange in transactions. The move was inspired by the 2008 recession which threatened the entire global financial infrastructure. Initially, people began using it as a medium of exchange in black markets but eventually, it gained acceptance and became a very important asset to own.
While some people were using Bitcoin simply as a medium of exchange, others started betting against its changes in price while others focused on holding it until its value went up. Although Bitcoin is a decentralized currency, regulatory agencies have begun to introduce regulations specific to cryptocurrencies. Bitcoin still remains volatile but still a major player in the mainstream economy.
How has the price of Bitcoin changed?
At its introduction in 2009, bitcoin had basically no value. You could use your computer to mine bitcoins and all it would cost you is electricity. On May 18, 2010, the first commercial transaction involving bitcoin occurred. Programmer Laszlo Hanyecz exchanged 10,000 bitcoins for two pizzas valued at $41 then. A few years later, the same number of bitcoins were worth over $2.5 million. You can visit this page and learn more about the price of bitcoin over the years.
Early Bitcoin valuations
The decentralized nature of Bitcoin is considered to be one of its key selling points and a reason why people started using it as a medium of exchange. Bitcoin transactions are kept anonymous and require no special permission to be processed. Because of this, black market traders began using Bitcoin as a means of payment, triggering its rise in value.
Around 10 million bitcoins were exchanged in various deals involving illegal goods and by February 2011, Bitcoin had the same value as the US dollar. It would go on to overtake the dollar soon after with a single bitcoin trading at around $17 in June. The first price slump occurred when Mt. Gox, a bitcoin trading site was hacked and millions were lost and the value of one bitcoin dropped to $0.01.
2013 to 2016
At the beginning of 2013, one bitcoin was trading at $13.30 and by April, a single bitcoin was going for $230. Another system crash at Mt. Gox allowed hackers to steal again and this caused the price of Bitcoin to again drop to $68.50.
In October, Bitcoin started again gaining value with the price shooting up to $123. By December Bitcoin briefly traded at $1,237.50 before dropping to $687.02. This rise can be attributed to the Bitcoin halving in 2012. In 2014, bitcoin prices went up and down with Bitcoin trading at $315.21 at the beginning of 2015.
In 2016, Bitcoin’s price slowly went up until it was trading at $900 at the year-end. After the 2016 halving, Bitcoin broke the $,2000 mark for the first time around May 2017. In December 2017 Bitcoin’s price shot up to $19,345.49, then an all-time high. This is the period when several other digital currencies began to be developed to compete with Bitcoin.
In the next two years, Bitcoin’s price experienced minimal changes until December 2019 when the price dropped to $6, 635.84. Despite the world being ravaged by the COVID-19 pandemic, Bitcoin seemed unaffected as it traded at $29,000 at the end of 2020. Bitcoin hit an all-time high of $68,990.90 per bitcoin in 2021 although the world’s economy had been greatly affected by the pandemic.