What is a cryptocurrency?
The word ‘crypto’ originated from the Greek word, ‘kryptós’, which simply means confidential or something kept a secret. Cryptocurrencies are therefore digital standards of exchange in which cryptography is used for security.
Cryptocurrency can simply be seen as a digital currency that is created by private individuals or groups, used for trading. Cryptocurrency tends to challenge how the theory of how money works right from ages to date. But these changes seem to have excited some and left some worried.
Unlike other currencies, cryptocurrency is completely digital. Cryptocurrency cannot be printed like paper or coin. Cryptocurrency is exchanged solely online. Conventional forms of money are often created by the Central Bank of each country and circulated to the general public by Commercial banks.
Cryptocurrency on the other hand is completely transacted online. Unlike conventional currency that is regulated by the government, Cryptocurrency is decentralized, that is, it is not controlled by any individual or the government, therefore, it is simply created, traded, and regulated by the users of such coins.
What is Bitcoin
Bitcoin is simply a type of cryptocurrency that was established in 2009 by an idea set out by a vague and pseudonymous individual or group called Satoshi Nakamoto in a white paper. And so, the identity of the creator or creators of bitcoin is still a mystery to date. Bitcoin is also controlled by a decentralized authority.
Digital currency offers the commitment of lower transaction fees, unlike conventional online payment mechanisms. Bitcoin is only available in balances that are kept on a public ledger with transparent access to the public. Bitcoin exchanges are assessed by a vast quantity of computing power.
Individual bitcoins are not valuable as a commodity, and so, the currency is not issued or backed by the government or any banks. Despite not being a legal tender, Bitcoin is widely used all over the world and has triggered the creation of other digital currencies known as Altcoins. Today Bitcoin is popularly called BTC.
Bitcoin’s highest price movements
Amongst the numerous cryptocurrencies in the market, Bitcoin is known to have the most volatile exchange history. The first increase in the price of Bitcoin occurred in 2010 when its price rose from $0.0008 to $0.08.
And ever since, it’s been an upward and downward movement for the most widely traded coin to date. Due to these fluctuations, Bitcoin has been compared to the Beanie Babies of the 1980s, and the 17th century Dutch Tulip Mania. The fluctuations in the price of Bitcoin are a direct reflection of the dissatisfaction and excitement of Investors.
And so, it has been a bumpy ride to all Bitcoin investors over the last decade. Daily volatility has been one of the problems of Bitcoin, such that the double-digit price of the coin tends to rise and fall. Another problem causing the foundation of price would be the issues related to besetting its ecosystems such as the high presence of fraudsters and lack of regulation, which relatively makes the coin more volatile and subject to fluctuation.
Despite all these irregularities, there are periods when the price changes have outpaced the volatility experienced previously with the coin. Below we will take a look at some of the price movements experienced by Bitcoin along with the years.
The 2012-2013 price movement
The 2012–2013 Cypriot financial crisis – the European sovereign debt crisis, was one of the major factors that led to the rise in the price of Bitcoin. And so, until 2013, the United States dollars(US$) was the host of almost all the Bitcoin in the market.
As of April 2013, the price of Bitcoin declined from a record-high of $266 to $50 and steadily rose back to $100. But within two weeks of June 2013, the price dropped back to $70. On the 1st of October 2013, the price of Bitcoin peaked back at $140. Just within the period, the FBI seized The Silk Road, and the price decreased to $110.
After several weeks, it steadily rose to $200. On the 18th of November, the price of Bitcoin peaked at $900, and on the 28th of November, it reached $1,000.
The 2017 price movements
The year 2017 witnessed one of the biggest price movements in the history of Bitcoin. It was trading around $1000 at the beginning of the year and broke all the records during the course of one year.
Certainly, that was the first of many increases to be recorded in that same year, as Bitcoin hit a record high of $20,000 within 12 months. It was arguably the year that brought a lot of interest to the world of Bitcoin that some never predicted would occur.
The 2018 price movements
The price movement of Bitcoin in 2018 is arguably one of the worst declines in price experienced over the previous years – investors simply described it as a nightmare everyone was waiting to end.
Certainly, a lot of declines are always anticipated but it was scary as Bitcoin price dropped above 80% with $700 billion of total capitalization lost by the broader market. The events of the previous year, where Bitcoin was on the low but rose to a high record of $20,000 in December of 2017, made investors believe that the price will continue its upward rise in 2018.
Unfortunately, the price never went further beyond its peak on the 17th of December 2017. 2018 was therefore a downward slope for the price of Bitcoin. Generally speaking, 2018 was a bad year for the price of Bitcoin due to the massive decline in its price.
But based on other metrics such as volume of trade, then it was a pretty great year for bitcoin.
The 2019 Price Movements
The year started with a bear market as the price of Bitcoin was hovering around $3500 and started rising during the first half of the year. The price hit the ceiling of $12,000 by the month and again started retracting.
The rest of the year 2019, Bitcoin didn’t witness any big movements as the year ended with a price of approx. $7,000.
The 2020 price movements
2020 was a much better year for investors as the price of Bitcoin rose reasonably well as compared to the previous years. The price of the coin reached a record-high of $29000 right on the last day of the year 2020.
2020 was a year where the world witnessed the ravaging of the Corona Virus. Unfavorable incidents were predicted to occur in the world of cryptocurrency, especially the price of bitcoin. But events unfold, the value of Bitcoin quadrupled even amid the 2020 pandemic. Due to the pandemic, people have become more aware of the opportunities of investing in Bitcoin, which many took and invested in the currency rather than saving.
As the number of investments rose, it was certain that the effect of the pandemic won’t cause a big dent in the price of Bitcoin. That is, even if there will be a fall, it won’t be too drastic due to large numbers of investors. And so in 2020 more individuals and companies moved from savings to investing in Bitcoin.
The price was still quite volatile as so people were advised to invest in other sectors apart from Cryptocurrency. While some took the advice, Bitcoin, fortunately, saw more investors in 2020.
The May 2021 price movements….
Bitcoin price skyrocketed to $60000 in February 2021 and May 2021 simply because of occurrences that involved both Tesla and Coinbase respectively. There was massive interest from investors all over the world after Tesla announced that it had acquired $1.5 billion worth of Bitcoin along with the IPO of the U.S.’ biggest crypto exchange.
Due to Government speculation and failure of power in the Xinjiang area of China Bitcoin suffered a notable fall in price in May of 2021. These occurrences led to the decrease in the bitcoin hash rate – that is, the number of bitcoin being mined – and this equally led investors into selling their coins.
Finally, the rise or fall of Bitcoin is not easily assessed and determined as a change in events could lead to either a negative or positive change.
Written by: Narender Charan