Bitcoin is one of the most valuable cryptocurrencies at the moment. Unlike other asset types, Bitcoin and all other cryptocurrencies are highly volatile. Historically, the price of Bitcoin has proven to have a big impact on almost all cryptocurrency markets. Looking back, Bitcoin’s value has fluctuated dramatically over the years. At times it has had massive uptrends, followed by crushing downfalls. But still, sixteen years after the launch, the cryptocurrency stands tall in the market.
This article is intended to examine the price volatility Bitcoin had over the years and to explore why the price variation happens. If you are someone who is looking to invest in cryptocurrencies or is just curious about how Bitcoin’s price variation happens read on.
Bitcoin Price Variations
Table Of Contents
It is an established fact that the price of Bitcoin is subject to momentarily change. This is fueled by investor enthusiasm and the variations in demand and supply. While originally, the creator of Bitcoin – Satoshi Nakamoto introduced Bitcoin as an alternative digital token for daily transactions, this volatility in value made it more difficult for transactions. However, enthusiasts found other ways to use it.
Traders found the sudden price surges and downfalls of Bitcoin as a way to make instant profits, even though there is an immense amount of risk involved. At the same time, long-term term investors also found Bitcoin as a way to store their value digitally, generate wealth from market movements, and hedge against inflation by storing fiat currencies. It also helped that Bitcoin investments were pseudonymous and decentralized.
So, to say the least, Bitcoin has become much more than what it originally was intended to be. Today, the price fluctuation of Bitcoin is largely contributed by traders and investors who buy and sell aggressively to capitalize on price variations. However, many other factors at play affect Bitcoin price.
Factors that Influence Bitcoin Price Variations
Essentially, the price varies depending on the buy and sell orders. However various factors influence the behavior of the bitcoin market. After analyzing the historical price variation of Bitcoin, we have filtered out the five most influential factors that affect Bitcoin. They are:
Market Demand
One of the major factors that influence Bitcoin’s price is the market demand for the cryptocurrency. Since there is only a finite supply of Bitcoin when the demand exceeds the supply, the price naturally increases. Market demand can vary according to overall market sentiments fueled by media coverage, macroeconomics, adoption rates, and even the performance of traditional markets such as stock and forex.
Bitcoin Halving Event
Bitcoin periodically reduces the issuance of newly minted coins to the market. It works by reducing the mining rewards by half. The event is called Bitcoin halving. This happens every four years, with the help of smart contracts on the Bitcoin blockchain. Historically, it is observed that the Bitcoin price hikes to a new all-time high after a halving event.
Government Regulations
While cryptocurrencies are a decentralized asset, government regulations can have an impact on their value. Favorable regulations from the government have a positive impact, and vice versa.
Addition of New Cryptocurrencies
Although Bitcoin is the first practical cryptocurrency created, there are thousands of cryptocurrencies available today. With more affordable, scalable, and user-friendly alternatives, some investors may switch to alternatives (altcoins) from Bitcoin.
New Investment Opportunities
The introduction of new investment opportunities to the cryptocurrency market can have an impact on Bitcoin’s value. Now, you can find several financial products to invest in cryptocurrencies such as exchange-traded funds (ETFs), futures contracts, and institutional-grade custody solutions.
Bitcoin Price History from 2009 to 2024
Bitcoin was created on January 3rd, 2009 by Satoshi Nakamoto, and the first Bitcoin transaction was sent from Nakamoto to Hal Finney, a revered cryptographer and earliest Bitcoin miner. As you might expect, Bitcoin had no value at that time.
According to the analysis of the New Liberty Standard Exchange, the first exchange between Bitcoin and the US dollar happened in October 2009. It is recorded that the parties exchanged Bitcoin at a rate of $0.00099 per token. It was only in 2011 that Bitcoin was able to cross the $1 mark and went significantly beyond. However, today Bitcoin is valued at over $70,000.
Here is the detailed price history of Bitcoin:
| Year | Approximate High (in USD) | Approximate Low (in USD) |
|---|---|---|
| 2009 | $0.0041 | |
| 2010 | $0.40 | $0.00 |
| 2011 | $32 | $0.29 |
| 2012 | $16 | $4 |
| 2013 | $1,163 | $13 |
| 2014 | $13 | $310 |
| 2015 | $465 | $172 |
| 2016 | $981 | $351 |
| 2017 | $19,892 | $784 |
| 2018 | $18,343 | $3,217 |
| 2019 | $13,017 | $3,401 |
| 2020 | $29,096 | $3,850 |
| 2021 | $68,789 | $29,796 |
| 2022 | $47,835 | $18,490 |
| 2023 | $42,500 | $16,000 |
| 2024 | $73,750 | $39,800 |
Bitcoin Price History from 2009 – 2015
2010
While the early transactions established informal values a unified market price emerged in 2010. According to the first records, Bitcoin was valued at around $0.003 – $0.004 per coin.
2011
The first instances of dramatic highs and lows in Bitcoin Price were recorded in 2011. It first rose to $1 but dropped to $0.30 by the first half of 2011, only to reach a high of $31 by the end of the year.
2012-2013
By 2012, Bitcoin has become pretty popular among the public. Most investors and traders started to realize the potential gains of Bitcoin and started buying considerable amounts of Bitcoin. Which led to the surge of Bitcoin surpassing the $1000 mark by November 2013.
2014
After the peak in late 2013, investors started selling their Bitcoin possessions for the gains. Additionally, security concerns and uncertainty in regulations arose during this period, making the market more bearish. So, eventually, in 2014, the price of Bitcoin fell to about $300.
2015
By the end of 2015, more influencers started promoting various cryptocurrencies including Bitcoin, and the popularity grew further. This increasing acceptance of the digital asset is reflected in the value of Bitcoin. The coin was trading at a value of around $200 and $500.
Bitcoin Price History from 2016 – 2020
2016
Starting in 2016, Bitcoin showed the characteristics of steady growth, revitalizing the market, and increasing investor confidence. While Bitcoin started selling at $430 in 2016, by the end, it had reached around $970.
2017
The steady price surge in the past two years improved the market sentiments immensely, and more press started covering Bitcoin in a positive light. It all culminated in an unprecedented bull run in the market, with the price rising from $970 to $ 20,000 by the end of the year.
2018
Bitcoin once again proved how unpredictable its market value is in 2018 when it fell sharply to just $3,200 by the end of the year.
2019
While the previous year wasn’t that great for Bitcoin, 2019 was a redeeming year for the cryptocurrency. It climbed back to around $7,200 that year setting up another good year ahead.
2020
Amidst the pandemic and worldwide lockdown, Bitcoin managed to keep up the momentum it had in the previous year. It did not drop below $5000 this year and managed to close the year at $29,000.
Bitcoin Price History from 2021 – 2024
2021
2021 was another big year for Bitcoin. Institutional adoption grew this year, and huge investors were pumping a high sum of amount to the market, seeing the long-term value of blockchain-based cryptocurrencies. Bitcoin was one of the biggest targets of institutional adoption. However, the price didn’t stay stable at the time, it fluctuated between $30,000 and $60,000, finally closing at a value of about $46,000.
2022-2023
During the years 2022 and 2023, the environmental concerns of Bitcoin mining and the uncertainty in government regulations grew. The price fluctuates between $30,000 and $60,000 during these two years finally ending up at about $55,000.
2024
2024 was the best year for Bitcoin so far. At the start of the year, the SEC softened its restrictions on Bitcoin Spot ETFs and some other Bitcoin-related products. This improved investor confidence immensely. Additionally, the Bitcoin halving reduced the mining rewards from 6.25 BTC to 3.125 BTC, creating a high demand and lower supply, which drove the price significantly high.
In March, Bitcoin hit its all-time high of $73,750. It fell from the peak and was fluctuating between $55,000 and $65,000 over the last few months. However, the bull run is still going strong. By the end of October, which is the moment of writing the article, Bitcoin had once again crossed the $70,000 mark.
Events that Influenced Bitcoin Price
By exploring the major events that have influenced Bitcoin price in the future, we can better understand what “ticks” the market, and act accordingly when similar events happen in the future. Here are some of the major events that have made a significant impact on Bitcoin:
First Bitcoin Transaction (2009)
According to historical records, Hal Finney, a software engineer was the first to mine Bitcoin with his personal computer other than Satoshi Nakamoto. As a reward, Satoshi sent 10BTC from his wallet to Hal Finney, marking the first-ever cryptocurrency transaction in history.
Bitcoin Pizza Day (2010)
One of the most famous events in the history of Bitcoin is of course the famous Bitcoin Pizza Day of May 22, 2010. A software programmer and one of the early adopters of Bitcoin, Lazlo Hanyecz bought two pizzas for $10,000 BTC. This is the first recorded Bitcoin purchase. While $10,000 BTC seems like an exuberant sum to pay for two pizzas, it happened at a time when Bitcoin had no real-life monetary value.
Bitcoin Exchange Hack (2011)
Cryptocurrency exchanges and other DeFi platforms were emerging in numbers during the end of 2010 and the beginning of 2011. The crypto community got a major setback during this time when one of the major Bitcoin exchanges, Mt. GOX got hacked. The perpetrators managed to loot about 850,000 BTC, valued at $450 M at the time. This hack had a massive negative impact on investor confidence which led to a significant downtrend in BTC price in the subsequent months.
First Bitcoin Halving (2012)
The creator of Bitcoin had the vision to create a digital asset that is not only, secured and addressed the problem of double spending, but also a currency that tackled the issue of inflation in a way, by introducing the practice of halving. During a halving event that happens at about four years. The first having occurred on November 28, 2012. At the time of the first halving Bitcoin was valued at $12.35 but it surged to $127.0 within a hundred and fifty days.
Silk Road Shutdown (2013)
Silk Road was an illegal online marketplace that facilitated Bitcoin transactions. The FBI shut its operations down and seized the marketplace in October 2013. The shutdown of the marketplace resulted in a decline in the demand for Bitcoin and brought the price down for a short time.
Bitcoin’s First Bull Run (2013)
2013, marked a good year for Bitcoin and its investors. The press was reporting positive stories about cryptocurrencies, it got more mainstream attention as a result and the speculative trading activities were increasing at the time. Some regulatory changes were also favorable for cryptocurrency in some jurisdictions. This all culminated in a bull run and BTC sore to an all-time high of $1000 per coin.
China’s Ban (2017)
To address the growing financial concerns that cryptocurrencies brought to the Chinese market, the Chinese government banned all exchanges. It triggered a significant sell-off in the market, which resulted in a short-term downtrend in BTC.
SEC-approved Bitcoin ETFs (2024)
The SEC approved Bitcoin options trading and multiple Bitcoin ETFs in 2024, marking the invasion of Bitcoin and cryptocurrencies into the traditional market. Additionally, many government organizations around the world have taken favorable stands that are fueling more people to enter the market.
Conclusion
Bitcoin is the first and most popular blockchain-based cryptocurrency. It is having a massive bull run in 2024 fueled by positive press coverage, favorable regulations, increased mainstream awareness of cryptocurrencies, and the inclusion of more financial instruments such as Bitcoin futures and ETFs. In this article, we have delved deep into understanding what makes the Bitcoin market tick by analyzing historic Bitcoin prices.
