Bitcoin (BTC) is a digital asset, also referred to as a cryptocurrency, that enables individuals to conduct transactions directly with one another without intermediaries such as banks. As a digital medium for transferring and settling value, Bitcoin is secured against tampering, censorship, globally accessible, and energy-efficient. Launched in 2009, it is the first successful currency of its kind.
It was created by an unknown individual or group of people under the pseudonym Satoshi Nakamoto. Satoshi actively guided and developed the project for some time after its inception. However, on April 26, 2011, he sent a final email to his fellow developers, stating that he had "moved on to other projects." Today, more than 800 people contribute to Bitcoin's development, according to GitHub.
Satoshi created the most well-known cryptocurrency with a limited total supply of 21 million units, establishing digital scarcity for the first time. Over 91% of the total supply has been mined so far. Bitcoin is divisible up to 8 decimal places (one hundred-millionth). The smallest unit is called a "satoshi." Bitcoin's ticker is BTC, and it is used for trading in many different venues.
Bitcoin Price History
Bitcoin's price follows a cyclical pattern, experiencing peaks and troughs that are linked to its halving events. With each halving, the supply of new Bitcoin is cut in half, making it scarcer. Such halvings occur approximately every four years. Initially, 50 BTC were added into circulation with each block. After three halvings, Bitcoin's supply currently averages 6.25 BTC every 10 minutes. The next halving is expected to occur in 2024, reducing the block reward to 3.125 BTC. Miners are projected to mine the last BTC around the year 2140.
Bitcoin's Early Price – 2009
At launch, BTC had no price. It held no monetary value. When Satoshi mined the first block, 50 BTC entered circulation at $0.
Price from 2009–2015
Following its initial zero price, on July 17, 2010, its price jumped to $0.09.
Bitcoin's price rose again on April 13, 2011, from $1 to a peak of $29.60 by June 7, 2011, a gain of 2960% within three months.
This was followed by a sharp recession in the cryptocurrency markets, and Bitcoin's price hit a bottom of $2.05 by mid-November.
The following year, its price climbed from $4.85 on May 9 to $13.50 by August 15.
2012 proved to be an uneventful year for Bitcoin, but 2013 witnessed a strong price surge. Bitcoin started the year trading at $13.28 and reached $230 by April 8. This was followed by an equally rapid slowdown in its price, bringing it down to $68.50 a few weeks later on July 4.
In early October 2013, Bitcoin was trading at $123.00. By December, it had jumped to $1237.55 and then fell to $687.02 just three days later.
Bitcoin's price crashed throughout 2014 and reached $315.21 at the start of 2015.
2016–2020
Prices slowly increased throughout 2016 to over $900 by year-end.
In 2017, Bitcoin's price hovered around $1000 until it broke through $2000 in mid-May and then sharply surged to $19,345.49 on December 15.
Major investors, governments, economists, and scientists took notice, and other entities began developing cryptocurrencies to compete with Bitcoin.
Bitcoin's price moved sideways throughout 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 exceeding $10,000. However, it fell to $6,635.84 by mid-December.
In 2020, the economy stalled due to the COVID-19 pandemic. Bitcoin's price once again burst into action. The cryptocurrency started the year at $6,965.72. The pandemic lockdown and subsequent government policies fueled investor fears about the global economy and accelerated Bitcoin's rise.
At the close on November 23, it was trading at $19,157.16. Bitcoin's price reached just under $29,000 in December 2020, an increase of 416% from the start of the same year.
2021-2023
Bitcoin took less than a month in 2021 to break its 2020 price record, surpassing $40,000 by January 7, 2021. By mid-April, Bitcoin prices reached new all-time highs of over $60,000 after Coinbase, a cryptocurrency exchange, went public.
Institutional interest pushed its price even higher, and Bitcoin reached its peak of $63,558 on April 12, 2021.
By the summer of 2021, prices had fallen by 50%, reaching $29,796 on July 19. September saw another rally, with prices exceeding $52,693, but a major pullback brought it to a closing price of $40,710 about two weeks later.
On November 10, 2021, Bitcoin again reached an all-time high of $68,789 before closing at $64,995.
By mid-December 2021, Bitcoin had fallen to $46,164. The price began to fluctuate more as uncertainty about inflation and the emergence of a new COVID-19 variant, Omicron, continued to scare investors.
Between January and May 2022, Bitcoin's price continued to gradually decline, with closing prices reaching only $47,445 by the end of March, before falling further to $28,305 on May 11. This was the first time since July 2021 that Bitcoin closed below $30,000. On June 13, crypto prices crashed. Bitcoin fell below $23,000 for the first time since December 2020.
As the "crypto winter" began in November 2021, Bitcoin fell below $20,000 by the end of 2022.
The current price of the cryptocurrency can be found on the chart above.
How Is the Price of Bitcoin Calculated?
The price of Bitcoin is calculated based on the principles of supply and demand on a decentralized market. Essentially, it is determined by the price at which buyers are willing to buy Bitcoin from sellers and the price at which sellers are willing to sell their Bitcoin to buyers.
To get an idea of the current market price of Bitcoin, you can check the price on cryptocurrency exchanges, where buyers and sellers can trade Bitcoin with each other in real time. These exchanges use algorithms to match buyers and sellers and to calculate the current market price based on the latest trades. The price you see on a given exchange may differ slightly from that on other exchanges due to differences in trading volume, liquidity, and other factors.
In general, the price of Bitcoin is a function of the dynamics of market supply and demand, which are in constant flux based on a set of factors. Although it can be difficult to predict how the price will change over time, it is often influenced by broader trends in the economy and financial markets, as well as changes in the regulatory environment for cryptocurrencies.
What Influences the Price of Bitcoin?
Supply and Demand
- Similar to other cryptocurrencies, products, or services in a given country or economy, the price of Bitcoin and other cryptocurrencies depends on perceived value and supply and demand.
- If people believe that Bitcoin will be worth a certain amount, they will buy it, especially if they think it will increase in value.
- By design, only 21 million Bitcoins will ever be created.
- The closer the currency gets to its limit, the higher its price will be, provided demand remains the same or increases.
- Bitcoins are created through mining software and hardware at a specific rate. This rate is halved every four years (known as a Bitcoin halving), slowing the number of coins created.
- The price of Bitcoin will continue to rise as its popularity continues to grow and its supply cannot meet demand. However, if popularity wanes and demand falls, supply will exceed demand. Then the price of Bitcoin must fall unless it retains its value for other reasons.
Economic circumstances can influence the price of Bitcoin, as demonstrated during the COVID-19 pandemic.
New Bitcoin Financial Instruments
Bitcoin has become a financial instrument that investors and financial institutions use to store value and generate returns. As a result, derivatives have been created that are traded by investors. This influences the price of Bitcoin.
It can also be expected that speculation, hype around investment products, irrational exuberance, and investor panic and fear will affect Bitcoin's price, as demand will rise and fall with investor sentiment.
Competition
Other cryptocurrencies can also influence Bitcoin's price. There are several thousand cryptocurrencies, and the number continues to grow as regulators, institutions, and merchants pay attention to concerns and accept them as viable forms of payment and currency.
Finally, if users and investors believe other coins will prove 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 opposite direction.
Frequently Asked Questions
Can Bitcoin Reach a Price of $1,000,000?
Many experts and analysts have given various predictions for Bitcoin's price. One of the most popular predictions is the stock-to-flow model, which forecasts that BTC will reach $100,000 in 2024 and $1,000,000 in 2025. The latter figure still seems far off. Although this prediction is attractive to investors, keep in mind that Bitcoin is a volatile asset, price predictions are not guaranteed, and you should not invest what you cannot afford to lose. The average price prediction for Bitcoin for 2023 was around $31,000.
What Is the All-Time High Price for Bitcoin?
Bitcoin reached its all-time high price of $67,566.83 on November 8, 2021.
What Is the Lowest Price Bitcoin Has Ever Been?
Bitcoin began trading at $0.09 in July 2010.
Is Bitcoin a Good Investment?
Bitcoin is a cryptocurrency designed to be used as a payment method. Investors and traders have also begun using it as an investment, but its price is very volatile. This creates significant financial risk. It is best to speak with a professional financial advisor about your circumstances and goals before buying Bitcoin as an investment.
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How Often Does Bitcoin Halving Occur?
Bitcoin halving events are scheduled to occur approximately every four years or after every 210,000 blocks are mined. This mechanism is built into Bitcoin's protocol to control inflation and mimic the scarcity of precious metals like gold. The reduction in block reward means miners receive fewer new bitcoins for verifying transactions, which historically has preceded major bull runs in the market.
What Makes Bitcoin Valuable?
Bitcoin's value stems from a combination of factors including its decentralized nature, limited supply, and utility as a store of value and medium of exchange. Its cryptographic security and global accessibility contribute to its perception as "digital gold." Unlike fiat currencies, it cannot be inflated by central banks, making it attractive during economic uncertainty.
Can Bitcoin Transactions Be Traced?
All Bitcoin transactions are recorded on a public ledger called the blockchain. While transactions do not directly reveal personal identities, they are linked to digital addresses. With sophisticated analysis, it can be possible to trace transactions back to individuals, especially if they interact with regulated exchanges that require identity verification. Privacy techniques like using new addresses for each transaction can enhance anonymity.