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Among all asset classes, Bitcoin has had one of the more volatile trading histories. The cryptocurrency’s first significant price increase occurred in October 2010 when the value of a single bitcoin started moving past its long flat price of less than $0.10.
The cryptocurrency has experienced several massive rallies and spectacular crashes since it first became available. This article offers insight into Bitcoin’s volatile history and some reasons why its price acts the way it does.
Key Takeaways
- Since it was first introduced, Bitcoin has had a choppy and volatile trading history.
- Bitcoin was designed to be used as currency in daily transactions.
- While Bitcoin is a cryptocurrency, investors have also used it to store value and to hedge against inflation and market uncertainty.
- Bitcoin’s price is a product of supply, demand, and market sentiment.
Investopedia / Alice Morgan
Bitcoin’s Price History
The price changes for Bitcoin generally reflect investor enthusiasm, as well as the demand and supply dynamics in the market. Satoshi Nakamoto, the anonymous Bitcoin inventor(s), designed it for use in daily transactions—but it has become far more than a payment method.
It attracted traders who began to bet on its price changes. Investors turned to Bitcoin as a way to store value, generate wealth, and hedge against inflation, and institutions worked to create Bitcoin investment instruments.
Bitcoin’s price fluctuations are primarily driven by traders and investors who buy and sell aggressively in hopes of catching the next big move. If you’re thinking of investing in Bitcoin, be sure to select a reliable cryptocurrency exchange first.
Here’s a quick rundown of Bitcoin’s price history:
2009–2015
Bitcoin had a price of zero when it was introduced in 2009. Its price jumped from its long-held level of $0.10 to $0.20 on Oct. 26, 2010. Before the year had closed out, it had reached $0.30. In 2011, it started growing past $1, reaching a peak of $29.60 on June 8, 2011; however, a sharp recession in cryptocurrency markets followed, and Bitcoin’s price dropped, closing the year at about $5.
The year 2012 proved to be a generally uneventful year for Bitcoin, though it did increase by a few dollars; however, 2013 witnessed strong gains in price. Bitcoin began the year trading at $13, crossed $100 by April, then $200 by October.
The remainder of the year witnessed historic gains for Bitcoin. It crossed $1,000 in November and closed the 2012 year out at $732.
2016–2020
Prices slowly climbed through 2016 to over $900 by the end of the year. In 2017, Bitcoin’s price hovered around $1,000 until it broke $2,000 in mid-May and then skyrocketed to close at $19,188 on Dec. 16.
Mainstream investors, governments, economists, and scientists took notice, and other entities began developing cryptocurrencies to compete with Bitcoin.
Bitcoin’s price moved sideways in 2018 and 2019, with small bursts of activity. For example, there was a resurgence in price and trading volume in June 2019, with the price surpassing $10,000. However, it fell to a closing price of $6,612 by mid-December.
In 2020, the economy shut down due to the COVID-19 pandemic. Bitcoin’s price burst into action once again. The cryptocurrency opened the year at $7,161. The pandemic shutdown and subsequent government policies fed investors’ fears about the global economy and accelerated Bitcoin’s rise.
At the close on Nov. 23, Bitcoin was trading for $18,383. Bitcoin’s price closed at $28,993 on Dec. 31, 2020, increasing 416% from the start of that year.
2021–2023
Bitcoin took less than a month in 2021 to smash its 2020 price record, surpassing $40,000 by Jan. 7, 2021. By mid-April, Bitcoin prices reached new all-time highs of over $60,000 as Coinbase, a cryptocurrency exchange, went public. Institutional interest propelled its price further upward, and Bitcoin reached a peak of $64,895 on April 14, 2021.
By the summer of 2021, however, prices were down by 50%, closing at $30,829 on July 19. September saw another bull run, with BTC scraping $52,956, but a large drawdown took it to a closing price of $40,597 about two weeks later.
On Nov. 10, 2021, Bitcoin again reached an all-time high of $69,000 before closing at $64,921. In mid-December 2021, Bitcoin fell to a close of $46,211. The price started fluctuating more as uncertainty about inflation and the emergence of a new variant of COVID-19, Omicron, continued to spook investors.
Between January and May 2022, Bitcoin’s price continued to gradually decline, with closing prices only reaching $47,459 by the end of March before falling further to $29,000 on May 11. This was the first time since July 2021 that Bitcoin closed under $30,000. On June 13, crypto prices plunged, dropping below $23,000 for the first time since Dec. 2020. By the end of 2022, it was under $20,000.
Fortunes changed in 2023 as Bitcoin opened the year at a price of $16,530. It rose consistently throughout 2023, ending the year at $42,258.
Bitcoin Prices 2024
In January 2024, the long fight for Bitcoin Spot ETFs came to a close after the SEC was forced by courts to review its denial of certain Bitcoin-related investment products. Some brokerages swarmed the market and increased their holdings, while others, like Grayscale’s Bitcoin Trust (GBTC), experienced significant outflows at the onset.
The outflows from certain funds slowed going into March, somewhat settling the market. The market-wide rebalancing was likely because there were suddenly more options for investors to choose from.
Early 2024
Bitcoin’s price climbed quickly after the fund approvals—in late February and early March, it once again breached $60,000, setting a high of $69,210 on March 6 and another of $70,184 on March 8. On March 1, Bitcoin continued setting records, reaching $73,835 on Coinbase.
Mid 2024
On April 19, 2024, Bitcoin had its fourth and latest halving event, reducing the reward for a mined block from 6.25 BTC to 3.25 BTC. The cryptocurrency recorded a modest gain that day and closed at $63,821.
On September 18, 2024, the U.S. Federal Reserve announced its first rate cut since the start of the COVID-19 pandemic, lowering the target federal funds rate to 4.75%-5%. Predictably, the market had a positive reaction, with gains across major indices. Bitcoin also continued its trend of “mimicking” the stock market and, on Sep. 19, 2024, traded around $64,000, sharply higher than its price of about $60,000 just two days prior.
Late 2024
On Nov. 7, 2024, Bitcoin’s price hit another all-time high of $76,999 on Coinbase following Donald Trump’s re-election as President before closing at $75,820, a 9% increase from the closing price on Nov. 5. On Nov. 10, 2024, Bitcoin reached another milestone, crossing the $80,000 threshold on Crypto.com ($80,152.38). On Nov. 11, it continued pushing boundaries, and on the morning of Nov. 13, it made it past $91,000 ($91,203.83) on Coinbase. Market exuberance was unfaltering in the following weeks, pushing Bitcoin to unbelievable highs of $99,637 on Oanda, $99,543 on Coinbase, and $99,555 on Gemini on Nov. 22, 2024, by mid-day. At about 3 p.m. ET, Bitcoin broke through $100,000 on a European exchange, Whitebit, and closed at $99,513.13.
These significant increases are due to investor exuberance following Trump’s many promises on the campaign trail, such as replacing Securities and Exchange Commission Chairman Gary Gensler, making America “the crypto capital of the world,” and creating a “Strategic Bitcoin Reserve,” among others.
On Dec. 5, 2024, Bitcoin reached and broke through $100,000 on nearly every exchange following news about the appointment of a crypto-friendly Securities and Exchange Commission Commissioner. It continuously breaks records following news releases, leading many to wonder what Bitcoin will do next.
What Affects Bitcoin’s Price?
Supply and Demand
Like other currencies, products, or services within a country or economy, Bitcoin and other cryptocurrency prices depend on perceived value, supply, and demand. If people believe that Bitcoin is worth a specific amount, they will buy it, especially if they think its value will increase.
By design, only 21 million Bitcoins will ever be created. The closer Bitcoin gets to its limit, the higher, theoretically, its price should be, assuming all other factors remain the same. This limit is intended to keep increasing the value of Bitcoin over time as new coins become more and more scarce, putting upward pressure on demand.
Bitcoins are created by mining software and hardware at a specified rate. This rate splits in half every four years, slowing down the number of coins created. The last halving occurred on April 19, 2024. If events unfold the same way they have in the past, Bitcoin’s price can rise again; however, there is no guarantee that the market will react the same.
Bitcoin’s price should continue to rise as long as it continues to grow in popularity and its supply cannot meet demand. However, if popularity wanes and demand falls, there will be more supply than demand. Then, Bitcoin’s price should drop unless it maintains its value for other reasons.
New Bitcoin Securities
Another factor that affects Bitcoin’s price also relates to the supply and demand of related securities. Bitcoin became a financial instrument that investors and financial institutions use to store value and generate returns. As a result, derivatives have been developed to broaden access to BTC for a wider range of investors. This also influences the demand for Bitcoins.
Speculation, investment product hype, irrational exuberance, and investor panic and fear can also be expected to affect Bitcoin’s price because demand will rise and fall with investor sentiment.
As witnessed after the SEC approved Spot Bitcoin ETFs, regulatory activity causes market participants to take action. As new Bitcoin securities hit the market, Bitcoin’s price will adjust due to the changes in supply and demand.
Bitcoin ETFs
In January 2024, the U.S. Securities and Exchange Commission authorized U.S. exchange-traded products to buy and hold Bitcoin directly on behalf of their investors. Before that, ETFs were only permitted to gain indirect exposure to bitcoin through futures contracts. In October 2024, the SEC approved options contracts on select spot Bitcoin ETFs. As of November 2024, there were 36 Bitcoin spot ETFs, with combined assets exceeding $61 billion.
Cryptocurrency Competition
Other cryptocurrencies may also affect Bitcoin’s price. The utility of cryptocurrencies as a whole continues to grow as regulators, institutions, and merchants address concerns and adopt them as acceptable forms of payment and currency.
Lastly, if consumers and investors believe that other coins will prove to be more valuable than Bitcoin, demand will fall, taking prices with it. Or, demand will rise along with prices if sentiment and trading move in the bullish direction.
Is Bitcoin a Good Investment?
Bitcoin is a cryptocurrency designed as a payment method. Investors and traders also began using it as an investment, but its price is highly volatile. This creates a significant financial risk. It is best to talk to a professional financial advisor about your specific circumstances and goals before buying Bitcoin as an investment.
What Was Bitcoin’s Best Price Ever?
Bitcoin reached an all-time high price of $76,999 on Nov. 7, 2024.
What Was Bitcoin’s Price in 2009?
Bitcoin began trading in July 2010, so there was no market price set.
How Much Will 1 Bitcoin be Worth in 2030?
It’s difficult to predict what 1 BTC will be worth at any given moment. By 2030, 1 bitcoin could be worth millions or nothing, depending on what happens.
The Bottom Line
Since its launch in 2009, Bitcoin has remained a popular and closely followed asset and continues to demonstrate highly volatile price action. If past and recent events and prices are any indication, we can expect the volatility to continue as long as there is demand for it as an investment asset.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.
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