Amongst the different cryptocurrencies that are currently in use, bitcoin has had the most volatile trading history. Price volatility is the nature of Bitcoin trading since its very inception. The price of bitcoin first skyrocketed from $0.0008 to $0.08 in 2010. Since then, the value of bitcoins has undergone several ups and downs.
Bitcoin was invented in order to recuperate from the financial collapse of 2008. In a short span, the prices of bitcoin have undergone multiple bubbles and therefore its trading history has been choppy and volatile. For more information on Bitcoins, visit https://bit-qt.app
Factors that Influence Bitcoin Prices
Before taking a look at Bitcoin’s price history, let us understand the factors that affect the price of Bitcoins:
- Regulatory Developments: This has an outsized impact on the prices of Bitcoin. Depending on the positive and negative regulatory developments, the price of bitcoin increases or decreases accordingly.
- Institutional Investors: From being limited to only retail investors, Bitcoins have become an attractive class of assets for institutional investors in the last 10 years. This has brought more liquidity and has limited the volatility of the value of Bitcoin. For example, in 2020 the prices of bitcoins increased after several respected public figures spoke approvingly of Bitcoins.
- Industry Development: The development of technology and financial infrastructure has a direct impact on the future and price of Bitcoins. For example, in 2017, when Bitcoin trading was launched at Chicago Mercantile Exchange (CME), the price of bitcoins reached $20000.
Price History of Bitcoin
Although the regular change in value is common to bitcoin transactions, there have been periods when the price of bitcoins has faced volatile swings:
- 2011: The value of a Bitcoin rose from $1 in April to $ 32 in June. Following this steep ascent of almost 3200% within three months, the price plummeted to $2 in November 2011. The price rose to $4.80 in May 2012 and to $13.20 in August 2012.
- 2013: This was a decisive year for Bitcoin valuation. Beginning at $13.40, the digital currency suffered two price bubbles in 2013. The price of bitcoin rose to $220 during the beginning of April and took a subsequent hard fall to $70 in the middle of April. The price of bitcoin was $123.20 in October, $1156.10 in December, and fell to $760 by the end of the year.
- 2017: The price of bitcoin was around $1000 in January 2017. After a brief period of price decline in the first two months, the value of bitcoins observed an ascent from $975.50 to $20,089 between March and December. This intense price volatility in 2017 put Bitcoin in the global spotlight and economists and governments from all over the world began developing cryptocurrencies to compete with Bitcoin.
- 2019: In June 2019, the price surpassed $10,000 but fell to $7112.73 by December 2019
- 2020: Bitcoin prices burst into activity with the global pandemic in action. With a valuation of $7200 at the beginning of 2020, the fears about the global pandemic’s effects on the global economy further accelerated the rise in the value of Bitcoin. Bitcoins were trading for $18353 in November and $24000 in December 2020. Bitcoin valuation saw a 224% rise since the start of the year.
- 2021: The price of Bitcoin surpassed its previous limits by reaching an all-time high of $40000 in January 2021.
Due to market hype about its valuation, Bitcoin prices have suffered price bubbles and subsequent crashes as well, in the fashion of the Gartner Hype Cycle of peaks. Each ebb and flow in the pricing of Bitcoin has shed a light on the shortcomings of that particular cryptocurrency and has encouraged investors to further develop and strengthen their infrastructure.
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