Since its inception, bitcoin has become one of the most valuable and volatile assets in the market — although it plunged in 2022, it peaked at more than US$68,000 in 2021.
In just over a decade, Bitcoin has grown a cult-like following and surged to impressive heights. Now the digital asset of choice, its meteoric rise is unlike any other commodity or asset.
Bitcoin has paved the way for the growing cryptocurrency asset class, surging to an all-time high of US$68,649.05 on November 10, 2021. Benefiting from excess cash in the market and investor interest, the price of bitcoin rose more than 1,200 percent between March 2020 and November 2021.
While it's still the most well-known cryptocurrency, its bullish ascent crashed down in 2022.
What spurred bitcoin's price rise, and its fall, and where is it now? Read on to find out.
What is bitcoin?
Created to counter the 2008 financial crisis, Bitcoin has weathered extreme volatility, spiking to US$19,650 in 2017 before spending years locked below US$10,000. The cryptocurrency was unveiled in late 2008, meant to revolutionize the monetary system, and was first introduced in a white paper titled
The nine-page manifesto was penned by a notoriously elusive person (or persons) who used the pseudonym Satoshi Nakamoto, and it lays out a compelling argument and groundwork for the creation of a cyber-currency.
Cryptographically secured, the peer-to-peer electronic payment system was designed to be transparent and resistant to censorship, using the power of blockchain to create an immutable ledger preventing double-spending. The true allure for Bitcoin’s early adopters was in its potential to wrestle power away from banks and financial institutes and give it to the masses.
This was especially enticing as the fallout from the 2008 financial collapse ricocheted internationally. Described as the worst financial crisis since the Great Depression, US$7.4 billion in value was erased from the US stock market in 11 months, while the global economy shrank by an estimated US$2 trillion.
In July 2010, bitcoin began trading at US$0.0008, climbing to US$0.08 by month’s end. The cryptocurrency then slowly rose into the US$10 range until it spiked to US$250 in April 2013.
How many bitcoins are there?
Unlike traditional currencies that can increase circulation through printing, when did bitcoin start, the number of bitcoins is finite. There are 21 million in existence, of which 19,144,112 are in circulation, leaving just under 2 million to be mined.
This limit is a core function of Bitcoin's algorithm and was designed to offset inflation by maintaining scarcity.
A when a bitcoin miner uses highly specialized software to complete a block of transaction verifications on the Bitcoin blockchain. Roughly 900 bitcoins are currently mined per day; however, bitcoin price history is 5 years, and after 210,000 blocks are completed, the bitcoin protocol automatically reduces the number of new coins issued by half.
Halvings have occurred every four years since 2012, with the most recent happening in May 2020. Halving not only counteracts inflation but also supports the cryptocurrency’s value by ensuring that its price will increase if demand remains the same.
How did COVID-19 affect the bitcoin price?
January 1, 2016, marked the beginning of bitcoin’s sustained price rise. It started the year at US$433 and ended it at US$959 — a 121 percent value increase in 12 months.
The next year brought the mainstream adoption of Bitcoin. Between January and December 2017, additional attention, the introduction of new cryptocurrencies, and coverage from mainstream financial media added 1,729 percent to the crypto-coins value — it rose from US$1,035.24 in January to US$18,940.57 in December.
This record-setting threshold was unsustainable, and Bitcoin fell victim to its own volatility, which steadily eroded its previous gains. Despite that decrease in value, the virtual currency still held above US$3,190, the bitcoin starting price, a low it has not hit again since that time.
Since launching in 2008, opponents of Bitcoin have used the digital currency’s short history to defend their reluctance to support the new asset. Questions have arisen about how Bitcoin would perform during a financial crisis or recession, as the coin is extremely susceptible to uncertainty.
2020 proved a testing ground for the digital coin’s ability to weather financial upheaval. Started the year at US$6,950.56, the highest bitcoin price
, a widespread selloff in March brought its value to US$4,841.67 — a 30 percent decline.
The low created a buying opportunity that helped bitcoin gain back its losses by May. Like safe-haven metal Bitcoin began to emerge as a protective asset for the Millennial and Generation Z crowd.
The rally continued throughout 2020, and the digital asset ended the year at US$29,402.64, a 323 percent year-over-year increase and a 507 percent rise from its March drop.
By comparison, gold, one of the best-performing commodities of 2020, added 38 percent to its value from the low in March through December, setting an all-time high of US$2,060 per ounce in August.
What was the highest price for Bitcoin?
Bitcoin’s ascent continued in 2021, rallying to an all-time high of US$68,649.05 in November, a 98.82 percent increase from January’s value. By the end of the year, the digital asset had shed some of its value, ending the 12-month period at US$47,897.16 — still a 62 percent year-over-year increase.
So what led to this all-time high? A few different factors acted as price catalysts.
Much of the growth in 2021 was attributed to investor risk-on appetite, as well as Tesla’s (NASDAQ: purchase of US$1.5 billion in bitcoin. The activity was further compounded when Tesla reported plans to begin accepting bitcoin as payment for its electric vehicles. However, following some criticism from investors and environmentalists, the electric car maker announced in 2021 that it would be conducting it's on the amount of renewable energy used to mine the cryptocurrency before allowing customers to buy cars with it, and the option remains shelved as of early 2023.
Increased money printing in response to the pandemic also benefited Bitcoin, as investors with more capital looked to diversify their portfolios.
The success of the world’s first crypto amid the market ups and downs of 2020 and 2021 led to more interest and investment in other cryptocurrencies and digital assets as well.
For example, 2021 saw the rise of the Utilizing blockchain technology, NFTs are unique crypto assets that are stored, sold, and traded digitally. The NFT concept is widely used for art and other digital mediums to allow buyers to own a specific asset. It is estimated that the NFT market grew to more than US$40 billion in 2021, with bitcoin's lowest price, driven exclusively by cryptocurrencies, the only form of payment for NFTs.
Bitcoin’s mainstream acceptance may be a continued price catalyst as more businesses accept the digital token as payment; the growing market for digital assets, as well as could all aid in the momentum of the cryptocurrency space.
What is Bitcoin today?
While notoriety has catapulted the first digital currency to all-time highs, the primary headwind for the crypto coin is its frequent volatility, which was on full display in early 2022, when prices fell by more than 50 percent.
Market uncertainty continued to weigh heavily on the world’s first exclusively digital currency during the second quarter of 2022, sending values below US$20,000 for the first time since December 2020.
Prices for bitcoin remained rangebound through Q3 and into Q4, for the most part hovering between about US$19,000 and US$21,000. They ended Q4 by moving even lower to settle below US$17,500 through November and most of December.
2023 started on a bright note for the price of bitcoin, as it ultimately move back to nearly US$24,000. As of mid-February, it's holding above US$21,000.
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