Most of us have a hard time dealing with crypto’s volatility and a bear market period. We become easily discouraged, panic, and we are usually quick to bail out our investments when the market is unstable. The only thing that can keep us cool and our minds calmed is learning about the process of the BTC price formation over the years since its debut in 2009.
A look back at the history of BTC price has much to teach us on the process of cryptocurrency growth. When we look back at BTC’s process of gaining value to where it stands today, it revealed to us that for any cryptocurrency to gain value it must pass through the fire of crashing and dumping. It's through the process of crashing and dumping that the rising usually emerges.
I urge you to follow me down the history lane to where BTC started to the current price at the time of writing. I hope to provide a summary of some notable events that may have contributed to the price of BTC we have today.
2008-2009, The Year Ideas Meet Innovation
In the last quarter of the year 2008, October 31, to be precise, Satoshi Nakamoto published the Bitcoin white paper “Bitcoin: A Peer-to-Peer Electronic Cash System" a detailed plan for a decentralized alternative system of money that required no trust between two people.
Three months later, Satoshi Nakamoto mined the network’s first block on January 3rd, 2009. The block was very significant that Satoshi inscribed it “The Times 03/Jan/2009 Chancellor on the brink of second bailout for banks." The reference was directed to Times news at the time and is interpreted to mean that bitcoin was a replacement for the failing and decaying banking system.
There was no actual usage for BTC at the beginning and its value was next to nothing. The only usage for BTC at this time was for people to send it to one another. There was no ICO, individuals mined it on their computer. The price of bitcoin at this time was how much electricity it cost to mine it.
Pizza BTC Experience of 2010
The actual value of any currency is in how many goods and services it can buy. If no one accepts the money then such is good for nothing. BTC is money, if no one would accept it, then it will not be valued. The first exchange with BTC for real good happened on May 18, thanks to Laszlo Hanyecz, the pizza-loving guy. Most of us have heard about the Bitcoin pizza story but never really know how the event transpired.
The BTC pizza drama started at a Bitcoin forum, where Lazlo Henyecz, a computer programmer, requested to pay 10,000 bitcoins to anyone who can supply him with two large pizzas. Another guy named Jeremy Strurdivant took up the challenge and delivered two large pizzas to his doorstep. This is where the BTC transaction in real use case was first made in Bitcoin history. The total cost of the pizzas in USD was $41, this value was used to determine the accurate value for BTC by dividing the $41 by 10,000 bitcoins. BTC thus got an initial value of $0.0041. unbelievable right? The 10,000 bitcoins were valued at $2.4 million after five years. hmm! This is so interesting.
First crypto exchange born in 2010
The first crypto exchange was launched in July 2010 by Mt. Girsox, an organized centralized platform for BTC trading. From here, BTC began to gain some significance, rising from $0.0041 to $0.09 in the same month the exchange was launched. By December the same year, BTC would be trading at $0.23.
Bitcoin and Black Market
In the year 2011 BTC began to gain some significant usage, this was largely due to underworld activities. Because of the anonymity in the transaction with BTC, it was enthusiastically accepted in the black market as the only form of payment. This is where you hear about the Silk Road story with BTC. BTC was used at this time mostly for illegal business dealings. This is why cryptocurrency is still viewed as a means of sponsoring terrorists and other illegal business dealings today.
However, this branding of BTC as an unflattering image didn't stop its acceptable and rising price. As of February that same year BTC's price touched $1 and went a little above. BTC continued to rise and reached $17 in June that year. The first crash happened this same month after the first exchange Mt.Gox was hacked and lost millions of dollars in BTC. BTC crashed to $0.1 following Mt.Gox announcement.
Nevertheless, BTC would soon bounce back to reach $0.29 to $26.15 that year.
2012 to 2016, a Period of Transformation
Not much happened at the earlier stage of the first year in this period. In August 2012, BTC experienced a second crash due to a Ponzi scheme rug pull where over a total of 700,000 bitcoins were stolen from investors. BTC suffered about a 56% drop in price following the event.
The First Bitcoin halving happened on November 28, 2012. Those who understand how BTC works would know the significance of this event. However, the halving didn't have much impact on the price of BTC as BTC only managed to raise between $3.88 as its lowest that year to $13.47 by the end of the year.
2013 to 2016 represent the period of growth and volatility for BTC. 2013 was quite a rollercoaster year for BTC. It started at $13.30 and finished the year at a peak price of $770. There was always a rise and fall along to reaching that figure.
China's first ban on Bitcoin came in 2013, causing BTC to fall by 50% in December that year.
In 2014 BTC started the year with a high price of $770.44. a lot happened down the road and by December but BTC was trading at just $378.64.
2015 was a year of consolidation for BTC as it continued to bleed, and by September BTC came down low to $227.34.
2016 would be another significant year for BTC as it underwent its second halving in July that year. Following the halving, BTC had a massive bull run from $430 to $975 by the end of the year.
The Period of Adoption, 2017-2019
The year 2017 started the wider adoption of BTC that culminated in a very bullish run. The Bitcoin network grew exponentially this year, thanks to mainstream media who continue to fuel the narrative of rising BTC price. Massive buying of BTC took place this year, leading to a record-breaking high price of $19,783,06. This frenzy buying came to an end just a few weeks after BCH fork. BTC price crashed by 50% that time.
2018 was the year of the bear market for BTC. After the crash in mid-December due to the effect of the fork away of BCH, many investors excited BTC, and from there BTC practically bred throughout the year.
2019 was a correction year for BTC. BTC slowly climbed back to a five-digit figure by the last half of the year. This was the time many investors positioned themselves for a speculative bull run on the background of the anticipated halving in 2020. This is the period when the big players and institutions came into BTC.
2020-2021 The Bull Run Started started
The coming of covid 19 on the world has both negative and positive effects on BTC. Immediately the covid started BTC crashed heavily from $10,000 to $4,000 in one day. It seems from here that the market was dead. But BTC recovered to get to an all-time high of $64,000 from that time to November 2021. From here to the present time you all know about it. So, I give you the right to complete the story.
Key notable catalysts to the exponential growth were institutional purchases from Microstrategy and Tesla.
The lessons learned from this summary of the history of BTC price are many. As an amateur cryptocurrency investor, you can pick one or two lessons from this narrative.
Key references
https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp
https://bitcoin.org/en/bitcoin-paper
https://www.investing.com/crypto/bitcoin/historical-data
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