The price of Bitcoin is what the majority of people focus on. From starting out at less than $0.01 to the peak of $20,000, the Bitcoin price history has been a roller coaster, with numerous ups and downs.
When Bitcoin was first born, there was no price attached to the cryptocurrency to begin with. Early miners would often send Bitcoins to other people as gifts for free so that they could play with the technology. One of the early Bitcoin developers, Martti Malmi, believes he made the first Bitcoin-to-US dollar transaction when he sold 5,050 Bitcoin for $5.02 on 12th October 2009. This could be regarded as the beginning of the Bitcoin price history.
A more infamous transaction was soon to take place though, when Lazlo Hanyecz managed to buy two pizzas using Bitcoin. The total cost of the pizzas was $25, so Lazlo had to part with 10,000 Bitcoin at the time. This was a momentous occasion in the early life of Bitcoin as this was the first time anything had ever been purchased with the cryptocurrency. The value of Bitcoin at this time was $0.0025. This figure shows how early Bitcoin was in its lifespan.
Mt Gox was the first exchange to open in July 2010. Created by Jed McCaleb, the price of Bitcoin was around $0.07 at the time. It would take another seven months for Bitcoin to reach parity with the dollar. Whilst this may seem like a long time, in reality the price rise was extremely quick.
However, it was the creation of another website that really caught people’s attention.
The Silk Road
On 1st June 2011, Gawker – a US blog site – ran an article titled: “The underground website where you can buy any drug imaginable”. The website was of course The Silk Road, which was run by Ross Ulbricht.
The Silk Road’s use of Bitcoin created huge interest in the cryptocurrency community. For the first time people from around the world could buy their drugs anonymously (at the time) from anywhere. The site even had ratings on the quality of the product and of the buyers and sellers involved.
Bailout of Cyprus banks
After The Silk Road built interest in Bitcoin, the price continued to rise slowly despite suffering some hiccups along the way. Another catalyst for a sharp movement in the Bitcoin price was the financial crisis that took place in Cyprus.
A knock-on effect of the 2008 financial crisis, these events were widely publicised in the media, with people queuing outside banks unable to access their own money. It was at this time that those in the media, particularly Max Keiser, began to really push the Bitcoin narrative as an alternative. The Bitcoin argument was finally starting to be heard by those who had no interest in new technologies.
The crash back down
Those who bought Bitcoin for $1 had already seen a big crash in the price of the cryptocurrency when it went up to $30 and back down to $6. However, the price crash from $1,200 was a first for many. Opinion pieces flooded mainstream media of Bitcoin being dead. There were plenty of news articles about China banning Bitcoin, but it was the closure of Mt Gox that hit the cryptocurrency the hardest.
For many, Mt Gox was the place to buy Bitcoin, and for those who were not wise, it was the place to store your Bitcoin. Mt Gox suffered from a hack where 744,000 Bitcoins were stolen and the exchange subsequently closed. Many to this day are hopeful that they might receive their Bitcoin back from Mt Gox, but the story continues.
2017 bull run
Despite claims that Bitcoin was dead, development continued. Along with this, new altcoins such as Ethereum had sprouted, causing plenty of excitement. The 2017 bull run was perhaps the most spectacular in the history of cryptocurrencies.
From below $1,000, Bitcoin shot all the way up to $20,000. The pizzas that Lazlo Hanyecz bought were beginning to look like extremely expensive purchases. The bull run sparked a frenzy, with newcomers entering the market consistently and throwing their money at Bitcoin and any other altcoin they could find, thinking that the prices wouldn’t stop rising. The FOMO was real.
2018 bear market
All good things must come to an end though, and the bear market took over once more at the start of 2018 and continues to this day. Many newcomers have become rekt and the old articles of Bitcoin being dead are being refurbished. What the bottom might be for Bitcoin and whether the cryptocurrency will ever recover back to $20,000 and higher, no-one knows.
The Bitcoin price history has always been a volatile and dramatic ride. In between this though, development of Bitcoin and new cryptocurrencies has been consistent and timely. Bitcoin is only just ten years old, and the whole industry still has a long way to go regardless of price.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.