In the world of digital and cryptocurrencies, one has captured the attention of many like none other: Bitcoin. Since its advent in 2009, the Bitcoin price has seen soaring highs and heart-stopping lows. To say that Bitcoin’s price volatility has been its hallmark would be an understatement. Today, we’ll analyze the roller-coaster history of BTC’s price and the key milestones that contributed to its rollercoaster ride over the years.
The Early Years: 2009-2011
The first exchange of Bitcoin for dollars was recorded in late 2009 by the New Liberty Standard Exchange. 5,050 Bitcoins were exchanged for $5.02 via PayPal. In other words, 1 Bitcoin was worth as much as 1/10th of a cent. Bitcoin stayed relatively steady from 2009 to 2011. Then in January 2011, the Bitcoin price surpassed $1 and hit an all-time high of $31 by June. However, this is where we saw this cryptocurrency’s notable volatility when it plummeted to $2 within mere months. It’s worth mentioning, however, that 2011 was when investors and early adopters started taking a considerable interest in Bitcoin and taking cryptocurrency seriously.
Market Maturity and Mt. Gox Exchange
Following this, most of 2012 was spent recovering from this jolt, and Bitcoin ended 2012 at $13.50, at least better than how 2011 had ended. That’s around when Mt.Gox, a Bitcoin exchange company accounting for over 70% of all Bitcoin transactions, made headlines and significantly impacted Bitcoin volatility.
In 2014, its price went up to $1100, only to crash to $200 after Mt. Gox collapsed due to a massive security breach and a 650,000 to 850,000 coin’ loss. This event woke authorities and pressed on the need for investor security and regulations in cryptocurrency. It also taught everyone to exercise caution and diligence when engaging with cryptocurrency exchanges.
Bitcoin’s Mainstream Recognition: 2015-2020
From 2015 to 2017, the Bitcoin price volatility remained relatively mute, fluctuating between $400-700. Nevertheless, the cryptocurrency made headlines again in 2017 when it started the year off between $1000-2000. This was still slow enough, but the currency reached an all-time high of $19000 by mid-December. Having begun trading at the Chicago Board Options Exchange, Bitcoin became extremely popular as its breakthrough year ended.
However, this was followed by another downhill road when the year ended at about $3500, with an almost 70% decrease from the previous year. Factors such as regulatory crackdowns, scalability issues, and speculative trading played a role in this volatile phase until the COVID-19 pandemic began in 2020.
COVID-19 Pandemic 2020 and Beyond
Bitcoin was doing reasonably decent in the initial COVID-19 wave, at $10,000 during the year’s first six weeks. However, once the pandemic was officially announced, it dropped by over 39% in just a single day in March. Cryptocurrency took just as much of a hit with the pandemic as any other industry. The price eventually surged, but it has been all up and down, and the uncertainty wouldn’t stop. At the moment, Bitcoin traded for around $26,000 as of mid-June 2023, with a 50% increase in just half a month. However, who knows what will come next with how unstable it’s been through the years?
Endnote
To wrap up, the price volatility of Bitcoin has been a defining factor in its history from 2009 till today. There have been several unignorable price swings, such as the Mt. Gox exchange event or the rise in 2017 and 2020. These result from market sentiment, regulatory developments, technological advancements, and macroeconomic conditions. Understanding these trends throughout history can help investors and market participants determine when to invest and when not to.