When Bitcoin first launched in 2009, cryptocurrencies were a new concept with little value. From its early days, one bitcoin took a year to reach a price of £0.08 and is now valued at roughly 219,000 times that.
However, the 2022 bear market has seen even the most powerful cryptocurrencies dive, leaving investors to speculate on the future of this emerging market.
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The Launch Of Bitcoin
While Bitcoin prices may have slumped of late, it remains the most valuable crypto and is an alternative to conventional currencies.
Transactions are validated through a proof-of-work mechanism powered by miners who solve equations using substantial computing power.
Satoshi Nakamoto penned the original whitepaper in 2008, although we do not know who he is.
The first Bitcoin was created on 3 January 2009. In the ensuing seven months, Nakamoto mined around 1.1 million BTC, worth roughly £20.5 billion at today’s value.
In 2010, Bitcoin rose from a zero price to £0.08 before hitting a peak of £27.60 in June 2011, although levelling out by mid-November as the markets experienced a recession. This trading period reflected what was to come, showing a 2,960 per cent gain in three months, with a sudden drop, albeit higher than previous trading values.
The next three years followed the same pattern:
- 2012 Bitcoin rose from £4.52 in May to £12.59 in August, with a largely uneventful remainder of the year.
- Bitcoin started 2013 at £12.38, reaching £214 on 8 April before decelerating sharply to £63.88 in July.
- By October 2013, Bitcoin had settled down at £115 but spiked in December to £1,154, surpassing the thousand-pound ceiling. However, this peak was short-lived, as BTC slumped to £641 in three days.
Without any significant changes to trading or market development, Bitcoin prices dropped in 2014 and started 2015 at a market value of £294, the same year that the Ethereum blockchain went live.
Bitcoin Prices From 2016 To 2019
As use cases and interest in cryptocurrencies grew, Bitcoin became more popular and volatile, with trading volumes snowballing in the latter half of 2017 when prices reached £9,325 ($10,000) for the first time.
This leap followed slow growth throughout 2016, leaving Bitcoin to hover at roughly £932 for several months before it took off, with economists, governments and investors taking note and developers working on new cryptocurrencies to leverage the trend.
Record prices doubled from record highs in November 2017 to £18,650 in December.
One of the major factors was that CME Group Inc. announced plans to launch futures contracts, representing the first financial cryptocurrency offered by a regulated American organisation.
The challenge was that the lack of regulatory oversight or liquidity meant that Bitcoin was exposed to market manipulation.
Frenzied activity in 2017 created a bubble. Across 2017 and 2018, over 800 ICOs amassed around £18.6 billion in capital funding, but with a proportion linked to scams or fraud, leading to many tokens collapsing within 12 months.
Bitcoin prices remained largely stable in 2018, with short, sharp bursts of movement, but the environment elsewhere in the crypto markets brought Bitcoin down to £3,730 by the end of 2018.
In June 2019, a price resurgence helped Bitcoin grow to the £9,300 mark before dipping to £6,187 by the middle of December.
Bitcoin Trading History 2019 To 2021
Cryptocurrency markets were affected in 2020 when the coronavirus pandemic shut down whole economies. The outcome for Bitcoin was positive, as government policies caused investors to panic about how lockdowns would impact traditional markets.
By 23 November 2020, Bitcoin had risen from £6,495 at the start of the year to £17,864, peaking at approximately £27,050 in December, hitting a 416 per cent growth marker in one year.
Part of the boom related to the lack of spending opportunities, with businesses such as hotels, restaurants, sports centres and cinemas closed in most countries. Consumers and traders had higher expendable income and often extra time with workplace closures and furlough payments introduced in the UK.
In what has since been dubbed the Bitcoin winter, 2021 showed no signs of slowing down:
- Bitcoin exceeded its previous 2020 peak within seven days, hitting £37,300 on 7 January 2021.
- By mid-April 2021, Bitcoin had achieved a record-high of £55,950, accompanied by the Coinbase exchange going public.
- Institutional investors jumped, driving market values to £59,268 on 12 April.
However, by the summer, Bitcoin prices had dropped by 50 per cent, followed by a bull run that saw values reach up to £49,136 in September before falling to a closing value of £37,962 14 days later.
The best was yet to come, with another all-time high of £64,145 market valuation on 10 November 2021, dropping again to £43,048 in December.
Several external influences contributed to these dramatic peaks and troughs, including new lockdown announcements, the appearance of the coronavirus Omicron variant, and persistent inflation.
The ProShares Bitcoin Strategy ETF started trading in October 2021 as the first launch of an ETF on a major US exchange, quickly followed by other ETF launches such as the VanEck Bitcoin Strategy ETF.
Investors, though, remained concerned about the long-term prospects of the markets with much uncertainty about how the COVID-19 pandemic would evolve. Moreover, monetary policies and sharp sell-offs in higher-risk assets meant the 2021 crypto boom was heading for a fall.
Bitcoin Pricing History In 2022
A combination of tightened central bank policies and the swift rise in crypto market values in 2021 ended with the advent of a new year.
From January to May 2022, Bitcoin followed a gradual price decline. The price dropped to £44,242 in March and £26,394 by May – the first time Bitcoin closed under £28,000 in a year.
Crypto prices experienced ongoing pressure from two significant events:
- In early 2022, Three Arrows Capital, a multi-billion hedge fund, collapsed amid a liquidity crisis. Celsius and Voyager Digital, both cryptocurrency lenders, followed.
- Luna and the Terra USD stablecoin followed suit, losing the peg against the US Dollar in May 2022 and causing investors to write off billions.
This cascading disaster caused crypto prices – almost across the board – to drop, with Bitcoin values hitting £21,448 in June 2022, the lowest price since December 2020.
In September 2022, one BTC is valued at £17,449, a far cry from its heady heights but still far from the original £0.08 market price back in 2010.
Despite sustained market turbulence, Bitcoin is the largest and highest-valued cryptocurrency but remains highly speculative and exposed to sudden, volatile fluctuations.
History Of Bitcoin: FAQs
What are the highest and lowest market prices Bitcoin has sold for?
Bitcoin was valued at zero when it first launched and reached £0.08 in 2010 – BTC quickly hit the next milestone with a market price of £27.60 in June 2011.
The all-time market high we have yet seen was in November 2021, when BTC reached £64,145, although it dropped back to £43,048 the following month.
Why is the price of Bitcoin so changeable?
The primary driver behind cryptocurrency prices is supply and demand. When investors are excited about the prospect or use case of crypto, increased demand and appetite mean that tokens become exponentially more valuable.
One of the challenges is that crypto is so speculative, and it is difficult to predict how markets will perform accurately. Influences such as new network announcements, forks in blockchains, economics and the success or failure of another crypto all feed into the Bitcoin market price.
Why does the Bitcoin market cap affect prices?
The cap on the number of Bitcoins that can come to market is 21 million. As the crypto gets close to that limit, the theory is that one token will become more valuable. Mining rates half once every four years, meaning the volume of coins to be mined gradually slows down.
What are Bitcoin securities?
Investors have increasing opportunities to invest in Bitcoin or use the Bitcoin market price to generate returns. They can also use Bitcoin as a store of value that is considered at least partly inflation-proof – although economic factors still affect cryptocurrency markets.
Derivatives created or traded by investors affect the market value of Bitcoin. The hype around new investment products, market confidence, or speculation about potential downturns can influence investor sentiment and reduce demand.
Is Bitcoin still worth the investment?
Cryptocurrencies can be used as payment methods, investment vehicles, governance tokens or stores of value, but the price of any token is subject to sudden change, except stablecoins that are pegged to fiat currency.
There is a high financial risk attached to crypto investments, and as Bitcoin trading values show, there is little certainty about how quickly prices will rise – or fall.
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