First came Bitcoin, a decentralized phenomenon that gained traction worldwide since its launch in 2009. Bitcoin, being the first cryptocurrency, has experienced a volatile evolution in its value, and nowadays, many people turn to options like this crypto lending platform to profit from it. Interested in finding what contributed to its growth and fluctuations? Let’s dive into the journey of how Bitcoin’s value rose over time by exploring milestones, price fluctuations, and the factors contributing to its growth as a digital asset.
Early Days and Price Discovery
At its advent, Bitcoin had no intrinsic value, and it took some time for the market to recognize its potential. Few exchanges existed at the time, and users were fewer in number. Yet, there were indications of Bitcoin’s future success.
In 2010, Bitcoin achieved a crucial milestone by allowing for the purchase of two pizzas at the price of 10,000 BTC, creating global recognition. During this early period, the worth of Bitcoin was fluctuating due to various factors ranging from market speculation to adoption speed and technological advancements. The value was still very much up in the air.
Mt. Gox and Price Volatility
The most significant event that occurred in the history of Bitcoin was the rise and collapse of Mt. Gox – the world’s largest cryptocurrency exchange. Mt. Gox was instrumental in facilitating Bitcoin’s price discovery at the time.
During 2013, the value of Bitcoin surged to a remarkable $260 per BTC due to an increase in media attention and growing interest from retail investors, which resulted in a significant rally. Unfortunately, everything came crashing down when hackers infiltrated their system, and Mt. Gox lost hundreds of thousands of Bitcoins, which subsequently led to its bankruptcy and ultimately, an extended bear market that caused the value of Bitcoin to decline catastrophically to around $50.
Mainstream Recognition and the 2017 Bull Run
In 2017, Bitcoin finally got the attention of the mainstream, with the cryptocurrency’s value jumping significantly to reach a historic high. The growth came with a price surge going from its low of $1,000 and hitting an all-time high of almost $20,000 in December of that year. Institutional interest and introduction of futures trading for cryptocurrencies helped fuel Bitcoin’s growth. This expansion was aided by growing global adoption of the digital currency. However, this gain was temporary, as their market trend took a sudden downswing. What followed was an extended slump marked by a bearish market that lasted throughout 2018.
Institutional Adoption and Recent Price Surge
Recent years have seen an exponential resurgence in Bitcoin’s value. The reason is largely due to increased institutional recognition and adoption. PayPal, Tesla, and Square among other corporations have integrated Bitcoin into their business models signaling a growing acceptance of cryptocurrencies as investments.
The pandemic has created rampant economic uncertainty. This has led investors worldwide to begin searching for alternative sources to store value. Which in turn has furthered the demand for Bitcoin and driven up its value. The valuation of Bitcoin broke records, soaring beyond $60,000 in early 2021. Nowadays, its value ranges around $26,000.
Factors Influencing Bitcoin’s Value
When it comes down to it, Bitcoin’s price is affected by quite a few factors throughout its journey. These factors include several key components that have influenced Bitcoin’s financial evolution greatly.
- One of the most prominent forces that can affect the value of Bitcoin is market sentiment. This is largely determined by media coverage, sudden changes in regulation, and the global economy as a whole. But of course, there are other aspects to consider.
- The widespread acceptance of Bitcoin into traditional financial systems and mainstream platforms is another factor which holds great significance. The more acceptance and usage is seen in the market, the higher its optimistic impact on the value of Bitcoin.
- Additional factors that have positively influenced the value of bitcoin are technology enhancements implemented, upgrades to the bitcoin network like the lightning network, scalability solutions, and much more. By improving the functionality and market attraction, these changes have had a positive impact on the price of Bitcoin.
- Not to mention, halving events play a crucial role in Bitcoin’s growth and development. “Halving,” a scheduled supply reduction process that occurs every four years has historically led to higher prices due to restrictions in new supply of Bitcoin flowing into the market.
- Lastly, regulatory decisions made by governments can have a dramatic effect on Bitcoin’s value. These decisions affect its legality, acceptance, and accessibility, which directly contributes to the fluctuation.