Bitcoin ups and downs throughout its history

Bitcoin investors fortunes have soared and plummeted in recent months. But how concerned about the economic role and impact of cryptocurrencies should the rest of us be?

A brief history of Bitcoin, click here to learn about the rise and falls of Bitcoin. In this article, you will learn about the significant volatility of digital currency, Bitcoin price, Bitcoin value and more.

Any popular thing in the world experienced peaks of fame and demand and went down into oblivion. A vivid example of this is currencies. Some historians believe that their fluctuations are a reflection of the life of our civilization.

Modern forms of money, called cryptocurrencies, are also subject to growth and decline. One of them, Bitcoin, is used in many countries as a common means of payment. It has appeared relatively recently (10 years ago). For its still short, but surprising history it has managed to be covered in all world mass media thanks to its unprecedented ups and downs in price. Let’s review some of them.

First years of Bitcoin

A fundamental change in attitude towards Bitcoin, its popularization occurred in 2010. First, in March, Nvidia released a CUDA client for the Windows operating system, and by September enthusiasts had released the first Open CL-based mining program.

The price of Bitcoin instantly rises to a record 17 cents and then drops to 6 cents amid rumours of interference with network microtransactions. The first bitcoin correction was 63% and lasted 23 days.

After making changes to the code, in November, two new records were set: a $1 million bitcoin capitalization and a 50 cents coin price.

In June 2011, the price of Bitcoin reached $32, after which it fell sharply to $2 in five months — that is, by 94 percent. Many investors did not know what to expect from crypto industry, so they decided to limit losses and withdraw completely from the game. Of course, these people now bite their elbows because they did not wait for the correction. Now they’d be multimillionaires.

TIME recognition and Mt.Gox fall

The popularization of Bitcoin, availability of programs for mining resulted in increased difficulty of coin mining. In literally three months, the network’s hash rate increased twentyfold, to 400–500 Ghash. Miners began to unite in pools, and the cost of the first cryptocurrency did not lag behind the difficulty of the network. On February 10, 2011, the price of the coin on the Mt.Gox exchange exceeded the mark of $1.

In April 2011, the official magazines Time and Forbes publish about Bitcoin. The rush around the coin is going off the charts. Dozens of exchanges are opening, bitcoins can be exchanged for pounds, rial and zloty. Mt.Gox is back in the lead. By early June, the price is over $10, and June 7 it rises up to $31.9!

Big money on the Internet, as well as in the real world, attracted the attention of hackers and dirty dealers. On June 13, 2011, the user allinvain reported about the theft of 25000 bitcoins (the equivalent of $400 thousand at that time) from his wallet.

A few more days later, the reputation of the Bitcoin was seriously hit. The Mt.Gox exchange’s database of accounts was hacked, the data of 65000 users were stolen, tens of thousands of fake coins were sent to the accounts on behalf of the administration. The price of cryptocurrency collapsed to almost one cent, trading was suspended. And at that time tens of thousands of real bitcoins were stolen from MyBitcoin accounts.

During the next one and a half years, until February 2013, Bitcoin was unable to recover its lost positions. The community, of course, did not accept the situation. Bitcoin conferences in the U.S. and Europe, release of mobile applications, work on secure storage of cryptocurrency, a huge amount of work, but … Events with MtGox scared away investors and put aside the economic development of Bitcoin for several years. Bitcoin correction reached 93% and only on February 28, 2013, after 600 days, the price returned to thirty dollars per coin.

China joins the game

At the end of 2013, the price was close to 1200 dollars — modest by today’s standards, but a lot at that time. In previous weeks, the market was encouraged by the US Senate hearings, which concluded that Bitcoin had great potential. Even China’s central bank cautiously approved.

But it didn’t last long. China soon concluded that Bitcoin was not a currency and began imposing restrictions. The bear market only exacerbated the crushing collapse of the Mt. Gox exchange that followed soon in 2014, when about 7 percent of all Bitcoins in circulation disappeared. At that time, those bitcoins were worth an incredible 473 million dollars. The crisis of confidence was also exacerbated by various DDoS attacks.

The first warning signs appeared on November 19, 2013, when the price fell one and a half times in a day, from $755 to $453. Although it rose soon afterwards, there were signs of a collapse at the end of the month, which eventually lasted over a year.

By the end of the correction in January 2015, the price had dropped to a mere 150 dollars, and the consequences were felt for more than a year. In a total of 411 days, the price had collapsed by 87 percents.

New horizons for cryptocurrencies

Since the first half of 2016, there have been trends towards a “revival” of the crypto industry. The increase in the share of altcoins, ICO blossoming, attracting hundreds of millions of dollars for startups, and all this against the backdrop of a mass of positive news.

During 2017, Bitcoin grew by an astounding 1950 percent, from $974 to $20,000.

At that time, some commentators warned that the bubble was about to burst. However, supporters of cryptocurrency argue that volatility can be good for Bitcoin. And many of them believe that the largest coin will soon repeat the glorious days of late 2017.

Here’s a list of some positive developments which were made at that time:

  • The Government of Japan recognized the cryptocurrency as a means of payment and allowed its circulation along with the national currency. Following Japan, the Republic of South Africa made a similar decision;
  • The Australian government waives taxes on purchases of cryptocurrency;
  • Many countries have hundreds of cryptomats to pay for goods and services with Bitcoin;
  • Largest gaming service Steam allowed its customers to pay for games with cryptocurrency;
  • Swiss SBB Railway Company (CFF) has added the option to pay for tickets with Bitcoin;
  • The massive growth of altcoins led to a sharp increase in projects at GitHub. As of today, their number exceeded 18 000 marks;
  • Permission from the Chinese government to withdraw bitcoins from Chinese cryptocurrency exchanges;
  • In December 2017, US financial regulators allow trading in Bitcoin futures contracts.

The bear market of 2018

2018 was a terrible year for Bitcoin: the price fell from a historical high by 83 percent.

It’s worse than the NASDAQ collapse of the dotcom bubble. The collapse also had catastrophic consequences for many digital currencies, which became useless. That’s because the fate of many cryptocurrencies depends in one way or another on the blockchain. Just look at the Etherium, which collapsed from $1400 in early 2018 to $110.

The last fall was quite recently: at the end of November Bitcoin managed to fall to the level of $6680. In this case, a month before the price was just under 10 thousand dollars.

In the anticipation of Bitcoin halving which is set to happen in May 2020, many investors expect BTC price to rise to a new all time high. You can make a great profit out of this scenario if you invest in Bitcoin cloud mining at Hashmart.io. Join our platform and earn cryptocurrency while it is still cheap!

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Andrey Costello

Andrey Costello

Bitcoin-maximalist. Optimistic family man and miner with six years of age. I write about complicated things from the future for people of our days.