In the article below, 5ROI Global will summarize the process of formation and development of Bitcoin. Special events revolve around Bitcoin. And why have hundreds of thousands of projects launched but Bitcoin is still at the top? Is the prolonged Covid epidemic the main reason for Bitcoin’s strong growth in the years 2020 – 2021? Let’s find out together!
Introduction
The evolution of Bitcoin (BTC) has surpassed the imagination of many with massive increases in value since 2009. However, not all have been bulls and bulls. Bitcoin has also experienced price drops and bear markets. Despite the volatility, cryptocurrencies have so far proven to outperform all traditional asset classes. A combination of factors has made up the Bitcoin price history and you can study them using different techniques and perspectives.
The process of formation and development of Bitcoin:
- In 2008, the domain Bitcoin.org was officially registered by a group of anonymous people. At the same time, the Bitcoin whitepaper was also published with the title “Bitcoin – A peer-to-peer electronic cash system”.
- 2009–2015, Bitcoin is priced at $0.0076 / BTC – This value is calculated by the electricity cost of a computer to mine Bitcoin when it was introduced in 2009. On July 17th, 2010, BTC was up to $0.09.
- On April 13, 2011, the Bitcoin price rebounded from $1 to a peak of $29.60 on June 7, 2021, up 2,960% within three months. This was followed by a sharp crypto market downturn and Bitcoin price bottoming at $2.05 in mid-November.
- In 2012, BTC increased from $4.85 (May 9) to $13.5 (August 15).
- In 2013 BTC was trading at around $13.28 and hit $230 on April 8. A rapid price drop followed.
- At the beginning of October 2013, Bitcoin was trading at $123. By December, BTC spiked to $1,237 and dropped to $687 three days later.
- The price of Bitcoin fell throughout 2014 and hit $315.21 in early 2015.
- From 2016 to 2020, BTC Price grew steadily 2016 to $900 by the end of 2016.
- In 2017, Bitcoin’s price hovered around $1,000 until it spiked to $19,345. At that time, Bitcoin started to receive great attention and other organizations started to develop other Crypto projects to compete with Bitcoin.
- In 2018, Bitcoin fell more than 80% and fell to the $3,000 level.
- In 2020, the shutdown of the economy due to the Covid -19 pandemic, the shutdown, and government policies have raised concerns among investors about the global economy about inflation. Since then, it has accelerated the rise of Bitcoin to the present time.
- In 2021, Bitcoin peaked with an impressive price point since its 2009 bull run. To date, Bitcoin has reached an all-time high of $64,000, with growing adoption in the market. official. Bitcoin’s journey is full of volatility. The price of this cryptocurrency often reacts to political, economic, and regulatory developments.
What are the factors affecting the current Bitcoin price?
Like other currencies, products, or services within a country or economy, the price of Bitcoin and other cryptocurrencies depends on perceived value and factors of supply and demand. If people believe that Bitcoin is worth a specific amount, they will pay it, especially if they think it will increase in value.
- Supply Limit: Only 21 million Bitcoins were created. The more Bitcoin is mined, the closer it is to the limit that its price will be higher (demand stays the same or increases).
- Bitcoin Halving: The reward paid to miners after 4 years will be halved to slow down the number of coins generated. Following the law of supply and demand, the price of Bitcoin will continue to rise because its supply may not be able to meet the demand.
- Economic circumstances can also affect the price of Bitcoin as seen during the COVID-19 pandemic.
- Supply and demand factors: Bitcoin has become a tool used by investors and financial institutions to store value and generate profits. Derivatives are being created and traded by brokers, investors, and traders, impacting the Bitcoin price further.
- Sentiment from the Market: Speculation, the hype about investment products, or investor panic and fear can also affect Bitcoin price as demand will increase and decrease according to investor sentiment.
- Influence from Altcoins: Other Cryptocurrencies can also affect the price of Bitcoin. Ultimately, if consumers and investors believe that other coins will prove to be more valuable than Bitcoin, then demand will decrease, bringing with it its price — or demand will increase with the price if sentiment shifts in the opposite direction.
- Laws and regulations by countries: Cryptocurrency embargo.
- The migration of miners in 2020: Large “mining factories” banned from mining in China must be relocated elsewhere.
- Regulatory agencies and organizations: Decisions to accept Bitcoin payments from large companies, corporations,…
The Return of Bitcoin in 2020
2020 is considered a boom year for BTC. After the correction from $10,000 to below $4,000 (March 2020), Bitcoin has begun its strong bull cycle and reached an ATH at $69,000 – with a gain of x18x. Let’s take a look back at some of the prominent events that had a direct impact on the price of Bitcoin at the time.
On March 13th, 2020, after trading above $10,000 in February 2020, Bitcoin fell below $4,000 in a market sell-off.
On March 11th, 2020, more than 281,000 Bitcoins were sold by Bitcoin storage wallets within a month. This shows that most of Bitcoin’s volatility at that stage was attributed to short-term speculators.
At the same time, crypto exchange Kraken saw an 83% increase in account registrations when Bitcoin crashed. This shows that there are large numbers of buyers “bottoming out” Bitcoin, these events are attributed to the onset of the COVID-19 pandemic.
- In August 2020, MicroStrategy invested $250 million in Bitcoin as a reserve asset.
- In October 2020, Square, Inc. invested about 1% of its total assets ($50 million) in buying Bitcoin.
- In November 2020, PayPal announced that US users could buy, hold, or sell Bitcoin.
- On November 30th, 2020, the bitcoin value hit a new all-time high of $19,860. Alexander Vinnik – the founder of BTC-e was convicted and sentenced to 5 years in prison for money laundering in France.
- In December 2020, Massachusetts Mutual Life Insurance Company announced a $100 million Bitcoin purchase – or 0.04% of its investment assets.
- On January 19th, 2021, Elon Musk repeatedly shared about Bitcoin on his Twitter. This caused BTC to rapidly increase around 5,000 prices in 1 hour to $37,299.
- On January 25th, 2021, Microstrategy announced that it would continue to buy Bitcoin, bringing the amount of Bitcoin it holds to $2.38 billion.
- On February 8th, 2021, Tesla announced $1.5 billion worth of Bitcoin purchases and plans to start accepting Bitcoin for transportation payments, pushing the Bitcoin price to $44,141.
- In September 2020, the Canton of Zug, Switzerland announced that it would begin accepting tax payments in Bitcoin in February 2021.
- In June 2021, the Legislative Assembly of El Salvador voted to pass a law to make Bitcoin legal tender in El Salvador.
- Also in June, a Taproot software upgrade was approved, adding support for Schnorr signatures, and improving the functionality of Smart Contracts and the Lightning Network. This upgrade was installed in November.
- On October 16th, 2021, the SEC approved the ProShares Bitcoin Strategy ETF – a cash-settled futures exchange-traded fund.
Conclusion
With a growth rate of more than 61 million times, since 2009, after 13 years of establishment and development, Bitcoin has turned from something considered a scam and worthless to one of the most sought-after assets. into a new generation of “gold”. The reasons behind this monumental growth are the intrinsic factors of cryptocurrencies, market sentiment, and economic events. However, past performance does not guarantee future results. It is helpful to understand why Bitcoin has such a high price trajectory, but it does not tell us what will happen in the future. When looking at the bigger picture, as a new asset class, Bitcoin has matured very quickly in just 12 years.
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For investors, trading digital assets is both an opportunity and a challenge with outstanding profit potential. 5ROI Global only provides useful information for investors to grasp, refer to and not provide financial investment advice of any kind.
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