• Market Cap: $233b

  • Jan 24, 2020

Bitcoin kickstarted the cryptocurrency revolution on the day it went live in early 2009. Over the next decade, cryptocurrencies have changed the way we know modern-day economics to be. From parliaments to prime-time news channels: Bitcoin & Bitcoin Price is being discussed everywhere. While there are over 2000 cryptocurrencies in the markets as of this writing, Bitcoin continues to be the largest cryptocurrency by market capitalization. To understand Bitcoin, one must understand the Bitcoin price history. Let us take a closer look at it in below charts:

Bitcoin (BTC) Price History Chart with Market Cap & Trade Volume

Bitcoin Price History Analysis

Let us take a look at some historic data for Bitcoin and try and understand the movement of the price of Bitcoins over the years.

What was the price of Bitcoin in 2009?

2009 was the year that Bitcoin mining started off. However, in 2009, Bitcoin was not traded/listed on any exchanges (because there were no Bitcoin exchanges in 2009). Hence, technically, the price of Bitcoin in 2009 was $0.

What was the price of Bitcoin in 2010?

2010 was an insignificant year when it comes to the price of Bitcoins - as the currency didn’t even manage to touch $1 in the entire year. However, multiple events in the year took place which is remembered even today. The most infamous of which was the pizza-day incident, when Laszlo Hanyecz, a BitcoinTalk forum user bought 2 Pizzas for 10,000 BTC (1 BTC=$0.0025). This was the first major proof of a physical item being bought in exchange for Bitcoins. Moreover, 2010 was also the year Mt. Gox started off.

What was the price of Bitcoin in 2011?

Similar to 2010, 2011 too wasn’t really a big year when you consider the price of bitcoins. The biggest landmark this year was the price of Bitcoin finally crossing $1 in February of the year. The price of Bitcoin goes as high as $29 - however, a major crash brings the price down to a little over $2 over the next few months. This crash was triggered by the first Mt. Gox hack where 4,019 Bitcoins were stolen. Bitcoin ended the year at a price of $4.6

What was the price of Bitcoin in 2012?

Bitcoin price at the starting of 2012 was $4.6 but the year saw a slow and steady rise and Bitcoin price at the end of 2012 was $13.44. A number of significant events took place in 2012 as well, which include the opening up of several new cryptocurrency exchanges - as well as names such as Wordpress started to accept Bitcoin payments. 2012 was also the year of the Linode hack where close to 43,000 Bitcoins were stolen. In November of the year, block rewards halved for the first time.

What was the price of Bitcoin in 2013?

Over the years Bitcoin prices had been fluctuating and the highest the currency had gone so far was close to $30. However, 2013 was the year that changed it all - and showed to the world, the massive potential of Bitcoin prices, making it a viable investment opportunity. The year started off with Bitcoin prices as low as $13.4 - but in late December, Bitcoin crossed several milestones to hit the $1000 mark. Bitcoin’s highest point of the year was $1,132. The currency closed the year of $764.

What was the price of Bitcoin in 2014?

While 2013 was a year when Bitcoin prices surged to new highs, Mt Gox, similar to 2011 - was hacked again - this time for 744,000 BTC - the biggest Bitcoin theft of all times. Following this incident, Mt Gox declared bankruptcy and shut down, causing the cryptocurrency prices to collapse over the course of the year. The year began at a price of $764 and closed at a price of $315.However, this was also the year major organizations such as Dell and Microsoft began to accept Bitcoin payments.

What was the price of Bitcoin in 2015?

Bitcoin price at the beginning of 2015 was $316 - however, this was a year of stable growth and the price didn’t really fluctuate much. Bitcoin ended the year at a price of $426. While the year began on a rather glum note with Bitstamp being hacked, it eventually turned out to be a more stable year than ever before. Bitcoin gained mainstream notoriety this year as it was featured on the front page of The Economist.

What was the price of Bitcoin in 2016?

2016 was the foundation year, which led to the Bitcoin-boom of 2017. 2016 began at a price of $426 and closed at a high of $970. 2016 was a year of steady growth as many new investors slowly began to express their curiosity and started to slowly invest. Over the course of the year, Steam began to accept Bitcoins. In July of 2016, the second halving-day came around where the block rewards were slashed by 50% - down to 12.5 Bitcoins per block from 25 Bitcoins per block.

What was the price of Bitcoin in 2017?

The biggest year on record for Bitcoin. 2017 started off at $970 and ended the year at a high of over $19700 - a massive growth for the currency. In January of the year, the price surged to $1,000 - for the first time in three years. Over the course of the year, Japan declared Bitcoin as a ‘legal tender’ in the country - becoming the first nation to do so. The year saw another major event, as Bitcoin (BTC) and Bitcoin Cash (BCH) split on the 1st of August.

In September, China announced a ban on all domestic cryptocurrency exchanges, bringing the price down to sub-$3000 levels in some markets. Following this however, was a period of intense growth where Bitcoin crossed the $5,000, $10,000, $15,000 marks for the first time - eventually peaking at a high of $19,498 in December of the year. It was a year of rapid growth which attracted many new as well as first-time investors towards investing in the currency.

Understanding the Economics Behind Bitcoin Price

While there are a number of reasons that cause Bitcoin’s price to rise or fall - it is basically the basic concepts of economics which drive the price of cryptocurrencies. Let us take a look at the economics behind bitcoin price movement.

  • Demand: Demand and Supply are the two basic concepts that govern the price of any commodity. It is the same for Bitcoin too. The higher the demand of the currency, the higher its price will be (because of the limited supply). However, while people continue to invest in Bitcoins all the time - the demand for Bitcoins starts to rise as the price falls. This elastic nature of Bitcoin means that the currency is always in demand.

  • Supply: Bitcoin, in many aspects, is similar to gold. It has often been called “digital gold” for the same reason. Like gold, which is an exhaustive precious metal available only in a limited quantity - Bitcoin too, is limited. Only 21 Million Bitcoins will ever exist. This aspect of scarcity and rarity of the currency gives it value. Out of these 21 Million, Satoshi Nakamoto, the anonymous creator of Bitcoins holds 4.75% of the total supply.

  • Flaws in Existing Banking Systems: The existing banking systems are a centralized concept, governed by a centralized governing body. These banking systems can be slow and often charge a high amount of fees too. However, when it comes to cryptocurrencies, there is no centralized authority that governs the transactions - it is instead a decentralized and distributed system based on an open ledger. The transactions are faster as well as cheaper compared to bank charges.

    Moreover, sometimes banks impose unfair embargos upon businesses or individuals. Cryptocurrencies help bypass this kind of a blockade. However, this also has a negative aspect to it because it then means that sometimes cryptocurrencies can also be used to make illegal purchases (the likes of which have been noticed over the darknet in the past).

  • Economic Crisis: In some countries, the fiat money might not be as reliable. This is often the case in third world nations where corruption is rampant and in war-torn countries where there is no proper banking system. Many African nations are now looking at cryptocurrencies as a better and safer investment option than their existing banking infrastructure which hasn’t really been serving their best interests. In countries where currencies are devalued, cryptocurrencies are of great help.

Can The Price of Bitcoin Be Manipulated?

The simple answer to this question is yes. The price of Bitcoin can be manipulated - but only to a certain extent. As explained above, Bitcoin is similar to gold in its pricing. People who own large quantities of Bitcoin hold a larger degree of control over the prices. If these large holders (often known as ‘whales’) begin to sell off their Bitcoin holdings, the price of cryptocurrencies will begin to fall.

Once a price fall begins, many people begin to sell off their holdings fearing a bigger crash. This is called ‘panic selling’ which rises due to FUD - Fear, Uncertainty, and Doubt in the markets. As more and more people begin to panic sell their holdings, the price begins to fall - this is a chain reaction which continues till all the panic sellers have sold off their holdings to avoid a loss (or to avoid bigger losses). Once the price fall stops, the ‘whales’, who sold off their currency at a higher price - buy more Bitcoins, which are now at a lower price, thanks to this panic that has been caused in the markets.

Price manipulation such as this is quite common in the cryptocurrency world. Apart from whales triggering such kind of a reaction in the markets, sometimes incidents such as exchanges being hacked also cause a similar crash in the prices. There have also been multiple allegations of insider trading in some exchanges. Basically, price manipulation is not extremely common - but it is not unheard of either.