To better understand the evolution of Bitcoin, you have to go back to the year of its creation, then go back in time, over the past few years:
History of Bitcoin:
- 2009: created by Satoshi Nakamoto, Bitcoin was officially launched at the beginning of 2009. They estimated its value based on the electricity consumption required to create a bitcoin, which was a ridiculous price of $0.001.
- 2010: The first Bitcoin transaction was made in Florida. Someone purchased two pizzas at a Papa John's store with 10,000 Bitcoins.
- 2011: This year will be significant for Bitcoin. Two years after its creation, the asset reached the value of $1 and then €1. This is the first consecration for the coin which is starting to make a name for itself in the cryptocurrency market.
- 2012: it was a smooth year, the coin stagnated in value. At the time, it was still only available on certain cryptocurrency platforms.
- 2013: Bitcoin price stands at $13, or about €10. In April of the same year, it took off, briefly reaching a value of over $220, before falling back to around $70 halfway through the month. In October 2013, there is again a clear increase in its value. It reached $195 at the end of the month, then $1,075 at the end of November, until reaching $1,079 on December 4, 2013, its highest price since its creation.
- 2014: the price of bitcoin soars and goes above €1,000 for the first time, i.e. nearly $1,150. Investors outside the circle of cryptocurrency enthusiasts then begin to take an interest in the asset. This year also sees the appearance of the first businesses accepting Bitcoin payments.
- 2015 / 2016: during these two years, the price of Bitcoin posted ups and downs before stabilizing at the end of 2016 at around $1,000 after the announcement of Brexit on June 24.
- 2017: the media begins to take an interest in digital assets, which only reinforces the euphoria around these new technologies. Towards the end of the year, bitcoin reaches €17,000, or around $20,000.
- 2018: the entire cryptocurrency market plunges and drags with it the price of Bitcoin, which loses nearly 80% of its value. It then trades at €2,800, or around $3,200.
- 2019: The price of Bitcoin begins to soar again in 2019, reaching $10,000 in June, before falling again, and ending the year around $7,500.
- 2020: investors are looking for alternatives to traditional investments and are turning massively to cryptocurrencies. This has the effect of boosting the price of bitcoin.
- 2021: After recording an increase in value at the end of 2020, Bitcoin will reach a new historic high in 2021. The coin is then trading above €50,000, or nearly $60,000. It is in this year 2021, more precisely in November, that Bitcoin also reaches its ATH of $69,000.
- 2022: a complicated year for Bitcoin since the BTC price fell below $16,000. Several factors are responsible for this decline. Such as the FTX affair, certain world events, and government decisions that are not very favorable to cryptos.
- Beginning of 2023: the price of Bitcoin started to rise again at the start of 2023 since the value of BTC passed the $20,000 mark.
What influences the price of Bitcoin?
The price of Bitcoin is not determined by any institution but driven solely by supply and demand. Unlike traditional currencies like the dollar or the euro.
They limit the amount of Bitcoins created and then halve it every four years. This means that the more the demand for Bitcoin increases, the more its price rises. Conversely, when the price decreases, the demand decreases. When the supply drops, it creates upward price pressure.
Regarding the factors that can influence the price of the asset:
- In the short term: market movements help modulate the price of cryptocurrencies, sometimes upwards, sometimes downwards. In 2022, the conflict in Ukraine and the FTX affair could affect the price of BTC.
- In the long term: the price of assets will be influenced by regulation on the one hand and on the other hand by the massive adoption of cryptocurrencies by institutional players.
It is also worth remembering that Bitcoin is more volatile than most traditional assets. Also, it is not impossible that its price increases by more than 10% in one day or, on the contrary, lose value in just a few hours.
The arrival of new institutional players should contribute to the gradual increase in the capitalization of the cryptocurrency market. In addition to boosting it, this should help regulate excess volatility.