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Blockchain

Financial Background: Bitcoin’s Price History

Who can forget the famous Bitcoin pizza transaction? In 2010, Laszlo Hanyecz bought two pizzas from Papa John’s and paid with 10,000 Bitcoins—worth about $41 at the time. In 2021, the two pizzas are worth over $630 million. Not a bad deal for the pizza guy.

To commemorate the transaction, May 22, 2010 is now officially known as “Bitcoin Pizza Day.”

That said, Bitcoin’s price history from 2009 to the present has been arbitrary and volatile. In January 2009, the Bitcoin network was released. Satoshi Nakamoto mined the first block, which returned a reward of 50 Bitcoins. The price of Bitcoin was $0.00. By October, its price was $0.10 and rose to about $0.39 towards the end of the year.

In 2011, Bitcoin rose above $1, marking a huge Bitcoin movement as its price matched the value of the U.S. dollar. Further fluctuations this year took the price over $30 only to crash to $2 later in the year. A year later showed a small rise in price to $13.

By 2013, the price of Bitcoin soared to above $200 at the beginning of the year, peaking to over $1,000 a couple of times, and finally closing the year at about $750.

Memories of the Silk Road website’s closure in 2013 stayed with the public in 2014, as Bitcoin struggled to stay around $300-$400. The price of Bitcoin closed at a little over $400 in 2015. Bitcoin jumped to over $1,000 in 2016 and climbed to over $19,800 in 2017.

There is not a clear explanation for this spectacular increase. Some believe there was a rise in institutional investor interest in Bitcoin, while others believe that it was simply market manipulation by a crypto whale — an individual who holds enough coins to affect the value of that currency.

But this spike was short-lived. The price crashed to a mere $3,900 by the end of December 2018.

Even though many believed Bitcoin was dead at this point, its next move showed the exact opposite. Bitcoin rose to over $7,000 by the end of 2019, though peaked at over $11,000 in mid-2019. The novel coronavirus produced a mass adoption of not only Bitcoin but also other cryptocurrencies. Bitcoin, however, saw its price increase from about $10,000 in October to breaking the $20,000 hurdle before December 2020—something that Bitcoin could not do in 2017.

In 2021, businesses, banks, institutional and retail investors, and so on began to invest in Bitcoin. Its price quickly skyrocketed to over $35,000 by January 2021 and surpassed $60,000 in March 2021. Its highest recorded price was recorded at about $64,000 in April. Bitcoin experienced a significant crash down to $40,000 in September only to rise again above $60,000 in mid-October.

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