Bitcoin, the most well-known cryptocurrency, paved the way for the cryptocurrency asset class.
Now the cryptocurrency of choice, its meteoric rise was unlike any other commodity, resource or asset. Bitcoin’s price rose more than 1,200 percent from March 2020 to reach US$69,044 on November 10, 2021.
The currency showcased its famous volatility in the following year, falling as low as US$15,787 by November 2022 amid economic uncertainty and a wave of negative media coverage.
The cryptocurrency started 2024 just below US$45,000 and has seen substantial gains in the first half of this year. Bitcoin reached its new all-time high price of US$73,115 on March 11, 2024.
So, where did Bitcoin start, and what has spurred Bitcoin’s price movements in recent years? Read on to find out.
When Bitcoin started trading in 2009, its starting price was a minuscule US$0.0009, making its price movements since then even more impressive.
The manifesto was penned by a notoriously elusive person (or persons) who used the pseudonym Satoshi Nakamoto. The author(s) laid out a compelling argument and groundwork for a new type of cyber-currency that would revolutionize the monetary system.
Cryptographically secured, Bitcoin was designed to be transparent and resistant to censorship, using the power of blockchain technology 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.
Many believe the message hints at Bitcoin’s mission, as it references an article in The London Times that criticized the British government’s inadequate response to the financial crisis of 2007 to 2008, particularly the government’s inability to provide effective relief and support to the struggling economy.
Bitcoin’s price finally broke through the US$1 mark in 2011, and moved as high as US$29.60 that year. However, it fell back down and remained relatively muted in 2012.
Bitcoin’s price saw its first significant growth in earnest in 2013, the year it broke through both US$100 and US$1,000. It climbed all the way to US$1,242 in December 2013.
From that peak, Bitcoin’s price began to fall, and it spent most of 2015 in the US$200 range. Its price turned around in December 2015 and began to climb again, and it ended the year at around US$430.
January 1, 2016, marked the beginning of Bitcoin’s sustained price rise. It started the year at US$433 and ended it at US$989 — a 128 percent value increase in 12 months.
In May the price of Bitcoin experienced a significant price increase, rising by 21 percent to US$539 at the end of the month. Its price went higher into June, peaking at US$764 on June 18. After that, it fell sharply and spent the summer in the high US$600 range. It dropped to US$517 on August 1 and started its climb all over again.
Through it all, Bitcoin remained the “gold standard” of cryptocurrencies, yet its price was subject to extreme volatility. At the beginning of 2019, it was around US$3,800, it reached nearly US$13,000 in June, but by December 2019 Bitcoin was trading at around US$7,2000.
2020 proved a testing ground for the digital coin’s ability to weather financial upheaval. Starting the year at US$6,950.56, a widespread selloff in March triggered by the pandemic brought its value to US$4,841.67 — a 30 percent decline.
The low created a buying opportunity that helped Bitcoin regain its losses by May. 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 what was then an all-time high of US$2,060 per ounce in August.
Almost immediately following its record close above US$69,000 in November 2021, Bitcoin’s value began to fall once again. Market uncertainty weighed especially heavily on Bitcoin in 2022. During the second quarter of that year, values dived below US$20,000 for the first time since December 2020.
Terra’s collapse had a domino effect on the industry as investors’ faith in crypto crumbled. In July, the Celsius network, a platform where users could deposit crypto into digital wallets to accrue interest, halted all transfers due to “extreme market conditions”, driving down the price of Bitcoin even further to US$19,047, a 60 percent decline from January 2022. In July, Celsius filed for Chapter 11 bankruptcy.
Once this news broke, investors withdrew their funds en masse, causing a liquidity crunch that collapsed FTX. Bankman-Fried was later arrested and sentenced to 25 years in federal prison on counts of money laundering, wire fraud and securities fraud.
Although Bitcoin was never implicated, the fallout of the FTX scandal led to a crisis of confidence across the sector and increased scrutiny from regulators and law enforcement. By the end of 2022, prices for Bitcoin had moved even lower to settle below US$17,000.
Bitcoin set a new all-time high price on March 14, 2024, when it reached US$73,737.94 per BTC. This new highest price came after more than a year of slowly climbing back up from its 2022 lows.
Bitcoin’s powerful performance cannot be understated as evidenced by its price performance in the later half of 2023 and so far in 2024.
Concerns with the banking system led the price of Bitcoin to rally in March 2023 to US$28,211 by March 21 after the failure of multiple US banks alarmed investors.
Bitcoin’s price jumped above US$30,000 on June 21, and on July 3, the crypto hit its highest price since May 2022 at US$31,500. It held above US$30,000 for nearly a month before dropping just below on July 16. By September 11, prices had slid further to US$25,150.
Heading into the final months of the year, the Bitcoin price benefited from increased institutional investment on the prospect of the SEC approving a bevy of spot Bitcoin exchange-traded funds by early 2024. In mid-November the price for the popular cryptocurrency was trading up at US$37,885, and by the end of the year that figure had risen further to US$42,228 per BTC.
Once the SEC’s approval of 11 spot Bitcoin ETFs hit the wires, the price per coin jumped again to US$46,620 on January 10, 2024. These investment vehicles were a major driving force behind the more than 42 percent rise in value for Bitcoin in February; it reached US$61,113 on the last day of the month.
Bitcoin often surges leading up to the halving events, which is when Bitcoin rewards are halved for miners. The most recent came in April when the reward for completing a block was cut from 6.25 to 3.125 Bitcoin.
Bitcoin often surges leading up to the halving, and several sources cited the 2024 halving as one of the forces that drove the price of Bitcoin to its newest high; however, with only three halvings in history, it’s difficult to assertively identify price trends.
The halving occurred at around 8:10 p.m. EDT on a Friday, and Bitcoin’s price remained stable within the US$63,000 to US$65,000 range over the ensuing weekend. On April 22, the Monday following the halving, it was slightly above US$66,000.
As of 4:00 p.m. EDT on August 8, Bitcoin was valued at US$59,490, having partially recovered from the deep losses it incurred in early August.
A blockchain is a digitized and decentralized public ledger of all cryptocurrency transactions.
Unlike traditional currencies that can increase circulation through printing, the number of Bitcoins is finite. This limit is a core function of Bitcoin’s algorithm and was designed to offset inflation by maintaining scarcity. There are 21 million in existence, of which 19,787,175 are in circulation as of August 8. This means there are 1,212,825 still unmined.
A new Bitcoin is created 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, after 210,000 blocks are completed, a Bitcoin protocol called a halving automatically reduces the number of new coins issued by half. Halving not only counteracts inflation but also supports the cryptocurrency’s value by ensuring that its price will increase if demand remains the same.
Halvings have occurred every four years since 2012, with the most recent happening on April 19, 2024. The next halving is expected to occur in 2028.
Coinbase Global is a secure online cryptocurrency exchange that makes it easy for investors to buy, sell, transfer and store cryptocurrencies such as Bitcoin.
While Bitcoin has reached new heights in 2024, one of its well-known features is its volatility. Investors who are more accepting of risk could look to the cryptocurrency space as there historically has been money to be made, and Bitcoin is regaining value after plummeting in 2022. However, there is also historically money to be lost, and investors who prefer to take smaller risks should look towards other avenues.
This is an updated version of an article first published by the Investing News Network in 2021.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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