The movements in the price of the most popular cryptocurrency Bitcoin are indicators of investors’ excitement as well as their dissatisfaction with the token’s promise. Bitcoin gained a lot of momentum and media attention as it was dubbed as yet another mode of exchange. This attracted a host of new traders who began to speculate on its prices. For a lot of investors, it was more than just a medium of exchange. It was a new form of investment that could lead to wealth generation while offering protection against negative market movements. Several institutions have now taken the opportunity to jump on the bandwagon and create investment instruments with Bitcoin. Visit: buy crypto
in Bitcoin’s prices have been largely caused by both investors and traders speculating a consistently high price that doesn’t have a solid backing. Instead, it stems from the expectation of more profit. As a result in January 2022, Bitcoin started losing its sheen as the prices began to dip.
The stepping stone
When Bitcoin was first introduced in 2009, its price was a flat zero. As far as the Bitcoin rate history goes, the crypto noted its first jump on July 17, 2010, when its price moved up to $.09. Then again on April 13, 2011, the rate moved up to $1 which peaked later by June 7 at $29.60. Within a span of just three months, the price grew by 2,960%. However, this growth was short-lived as it was soon followed by a slump where Bitcoin’s price was as low as $2.05 by mid-November. It registered another period of growth soon after when in the next year, the price stood at $4.85 on May 9 to $13.50 by Aug. 15.
The year 2012 was particularly slow and could be earmarked as a period of learning in the Bitcoin rate history. But 2013 seemed to make up for the loss as Bitcoin started off at $13.28 and reached $230 on April 8. But this joy was yet another momentary peak as, by July 4, the prices came down to $68.50. The game of highs and allows continued in the early days of October when Bitcoin was priced at $123 which took a massive jump to $1,237.55 only to fall three days later to $687.02. 2014 was a rather unimpressive year for the digital gold which was somewhat revived in 2015 where its per coin value was $315.21 at the beginning of the year.
Journey of a thousand miles
In 2016 and onwards, Bitcoin prices grew gradually and steadily. By the end of 2017, the rates were well over $900 and in 2017 they were around $1,000 only to break to $2,000 by May. It peaked tremendously at $19,345.49 by mid-December, much to the surprise and joy of many investors. At this point, several key investors, governments, financial pundits, and economists began to pay attention to Bitcoin. Some even started the process of creative alternative cryptocurrencies to compete with it.
In the next two years, Bitcoin prices showed little activity, moving only sideways. Both price and trading volume had grown by June 2019 and prices went well above $10,000 but only to dip again to stand at $6,635.84 by mid-December.
The pandemic wreaked havoc on financial markets and economies worldwide. Needless to mention, Bitcoin wasn’t spared either. However, an interesting pattern shaped up in this period and there were now more investors in the market with more money to invest. Thus, took off at $6,965.72 at the beginning of the year and then accelerated to $19,157.16 in November. From January to December, 2020 Bitcoin grew by 416% and closed a little under $29,000 in December 2020.
In less than a month’s time, Bitcoin broke its December 2020 record to cross $40,000 by January 7, 2021. It gained further and stood at an all-time high of $60,000 by mid-April. This attracted a lot of institutional investors to the crypto sector and it led to a further increase in the price that peaked at $63,558 on April 12, 2021.
However, the period of highs came crashing down as the rates fell by half to $29,796 on July 19. By September, the prices saw some solid gains as Bitcoin stood strong at $52,693 in August. It fell shortly after in two weeks to stand at $40,000.
Factors affecting the current price
Cryptocurrencies share a lot in common with currencies, goods, and services that are in a market. Thus the price of a crypto like Bitcoin is also determined by its overall perceived market value, supply as well as demand. If the investor sentiment is that the value of Bitcoin is worth a certain price and there is an expectation that the price would grow in the coming years, they’ll simply want to buy more. As we know by now, only 21 million Bitcoins are in existence and that’s the final number that can be mined. Thus, if the demand for Bitcoin stays consistent, its value will only rise as they gradually become scarce.
Typically, mining Bitcoins and bringing them into circulation requires specialized software and equipment. Even after this the mining process also happens at a certain rate. As a pattern seen over the years, the rate gets halved at an interval of every four years which simply slows down the number of coins that are created. Thus, it is safe to conclude that Bitcoin’s value can only be impacted by an unexpected fall in the demand for it.
Along with supply and demand, there is another key aspect that could affect Bitcoin’s price. As the crypto coin proved its mettle, a large number of investors began to see and treat it as an instrument to earn more wealth. Several derivatives have been created and traded in the market which also has an impact on Bitcoin’s value. Panic, fear, speculation, and unprecedented growth predictions could all add up to impact the overall demand for Bitcoin.