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Bitcoin Doubled Its Value in 2021. Here’s a Look at Its Price Over the Years

Bitcoin Doubled Its Value In 2021. Here’s A Look At Its Price Over The Years
Bitcoin/courtesy of pexels Bitcoin/courtesy of pexels
Bitcoin Doubled Its Value In 2021. Here’s A Look At Its Price Over The Years
Bitcoin/courtesy of pexels Bitcoin/courtesy of pexels

Bitcoin is expected to end 2021 with a value more than twice that of December 2020, capping a year in which cryptocurrency sparked widespread interest and curiosity.

Financial advisors have begun to incorporate cryptocurrency into their advice as more everyday investors wonder how it might fit into their portfolios. “This year, a lot of people bought cryptocurrency for the first time,” says Brittney Castro, a certified financial planner with Mint and the founder of the media company Financially Wise, based in Los Angeles.

These crypto newcomers are influencing the once-peripheral crypto landscape and moving the needle toward mainstream adoption, in addition to institutional adoption and government regulatory interest. “Fifty-one percent of Americans who own cryptocurrency purchased it in the last year,” says Lisa Lewis, a certified public accountant at TurboTax, citing data from a survey her firm conducted earlier this year.

Crypto newbies should, in most cases, buy Bitcoin or Ethereum, the most popular altcoin (alternative coin), as many experts advise. After starting the year at just under $30,000, Bitcoin (BTC) hit an all-time high of over $68,000 in November 2021, and the crypto industry as a whole grew to a total market cap of more than $2 trillion. In the meantime, the price of Ether (ETH) has risen from around $737 to around $4,000, depending on the day.

But here’s the thing about crypto: prices can drop by 15% or more in a matter of hours or overnight. In fact, they frequently do so. Cryptocurrency is known for its volatility with a few exceptions, such as stablecoins. That’s why experts advise investors to keep cryptocurrency investments to less than 5% of their overall portfolio and to never invest in cryptocurrency instead of saving for emergencies or paying off high-interest debt.

I considered some crypto experts and industry professionals’ views about Bitcoin’s price over the years and what that might tell us about its future as we near the end of this big year for crypto. From its inception in 2009 to the present, here’s a look at Bitcoin’s price history.

History of Bitcoin Prices

In comparison to other cryptos, Bitcoin has a much longer track record, though it is still in its infancy compared to the US stock market’s 200-year history.

Here’s a quick rundown of Bitcoin’s history, which is littered with the same ups, downs, and big swings as 2021:

The Birth of Bitcoin in 2009

The Bitcoin currency (BTC) was created concurrently with the invention of Bitcoin as a blockchain, making it the first of its kind in history.

“Without blockchain technology, the unit of value (BTC) would not have been possible, but there would never have been a Bitcoin blockchain without the currency,” says Robert Konsdorf, CEO of Facings, a Michigan-based company that creates user-friendly blockchain publishing tools.

The initial price of Bitcoin was $0. The founder, who goes by the pseudonym SatoshNakamototo, is famous for releasing the Bitcoin white paper, which explains how the new technology works.

The First ‘Jump’ in 2010

The first “big” jump in Bitcoin occurred in the summer of 2010. In the spring, the price was a fraction of a cent, but by July, it had risen to $0.09. Except for a small group of tech experts and finance enthusiasts, very few people were familiar enough with Bitcoin to purchase it. By October of 2010, the price had dropped to around $0.10.

Bitcoin Breaks the $1 Mark in 2011

Bitcoin’s first mini “bull run” began in April 2011, when it broke the $1 mark. Over the next three months, it increased by roughly 3,000 percent, reaching a high of between $29 and $32 (depending on the source) in June 2011. By November 2011, the price had dropped to $2.

The year after that was uneventful. In 2012, Bitcoin did not recover, ending the year between $13 and $14.

Bitcoin Breaks $100, Then $1,000, Then Falls in 2013

Bitcoin started the year at $13.28. In the first quarter of the year, it climbed to the $30 range, then accelerated in the last week of March. By April 1, Bitcoin had surpassed the $100 mark. Curious money enthusiasts and tech professionals flocked to Reddit’s online forums, wondering why this new asset class, which is unrelated to any physical commodity, could have value.

By November 2013, Bitcoin had surpassed $1,000, but by December, the price had plummeted to around $530.

Bitcoin Stalls from 2014 to 2016

Despite the volatility, these early rumblings persuaded Nelson Merchan, CEO of blockchain events company Light Node Media, to investigate cryptocurrency. Merchan, a college student at the time, purchased Bitcoin when it was around $600.

Merchan tells NextAdvisor, “I was a sophomore in college when I stumbled upon a Reddit post in early 2014 talking about this digital currency that had hit $1,000.” “If people are willing to pay $1,000 for digital currency, there must be something more to this,” I reasoned.

Merchan went on to learn more about Bitcoin, including its unique supply structure: “I discovered that there would only ever be 21 million BTC in existence.” So I thought to myself, ‘OK, if it’s already at $1,000 and there are only 21 million in the world, that’s going to be huge.’ He claims, “We’ve never really seen a currency of any kind have a limited supply amount.”

According to Merchan, the next two years will require a lot of patience. BTC’s price remained stable, and it wouldn’t reach $1,000 until 2017. Merchan avoided telling his friends about his mysterious investment because he didn’t know the future.

“This cryptocurrency thing didn’t pique people’s interest.” And the thing is, once you understand crypto, you don’t want to introduce others to it. People telling others to get in and then losing all their money have happened to me before.”

Bitcoin Breaks $1,000 and Starts a Bull Run in 2017

Bitcoin finally broke $1,000 in January 2017 after years of price fluctuations ranging from $100 to $900. This was the start of a euphoric bull run. In mid-May, prices doubled to $2,000, then skyrocketed to over $19,000 by December.

Merchan claims that his initial investments (which he estimates to be under $15,000) grew to millions in what seemed like an instant. Merchan had to adjust to his unexpected increase in net worth, but he maintained a cautious skepticism toward this newfound source of wealth.

“If it’s not in cash, you don’t really have that money,” Merchan says, “because in crypto, anything can drop pretty dramatically overnight.” “If you have a million dollars in the bank (in crypto), you must exercise extreme caution because if your monthly expenses continue to rise while the market falls 50%, you must now tighten your belt.”

Merchan’s long-term mindset turns out to be essential for Bitcoin’s next phase.

From 2017 to 2019, more ups and downs

The crypto industry began to take off as a result of media attention and a sharp rise in Bitcoin’s price. Thousands of altcoins were created as international diplomats, governments, mathematicians, economists, tech professionals, and financial experts debated cryptocurrency regulation and adoption.

During this time, Bitcoin’s price was mostly flat, with a few small spikes. The highest point was around $17,527 in January 2018. In December 2018, the lowest point was around $3,236.

Merchan recalls, “I went from having millions of dollars in crypto to having a couple of hundred thousand.”

Bitcoin’s price was around $7,200 at the end of 2019

The Coronavirus Pandemic in 2020

Bitcoin’s price began to accelerate in its upward climb after the coronavirus pandemic shut down the economy and sparked fears of inflationary pressure on the US dollar. Bitcoin’s price had increased by over 300 percent from January to December 2020. The price of the year ended up being around $29,374 — the highest it had ever been.

From 2021 to Now:

Despite the fact that the price of Bitcoin has nearly doubled since January 2021, it has not been without its usual volatility this year. In the first half of 2021, Bitcoin soared to an all-time high of over $64,000, only to plummet to below $30,000. In November, Bitcoin reached a new all-time high of over $68,000. Some experts predict that the price of Bitcoin will surpass $100,000, stating that it is a matter of when not if.

What Will Bitcoin’s Future Price Be?

Bitcoin is expected to reach $100,000 by 2023, according to conservative predictions, but more bullish crypto enthusiasts believe $250,000 is within reach. Major financial institutions are also weighing in on the debate, with JPMorgan forecasting a long-term high of $146,000 and Bloomberg forecasting a price of $400,000 by 2022.

Price predictions are mostly informed speculations because Bitcoin (and crypto in general) is so new. As a result, financial planners advise only investing in crypto with money you can afford to lose. Alternatively, you can rest easy knowing that by investing in mainstream low-cost index funds and ETFs, you may already be indirectly investing in crypto. Several blue-chip companies, such as Tesla and Square, have cryptocurrency in their portfolios or are planning to incorporate blockchain technology into their business models. DocuSign, a company that specializes in electronic signatures, has experimented with Ethereum integration to create advanced smart contracts.

What Factors Influence Bitcoin’s Price?

Bitcoin is valuable because of its limited supply, which has been steadily increasing demand from a growing number of investors. Some have also referred to it as an inflation hedge.

Many people in various industries believe that blockchain (the technology on which all crypto is based) can be a game-changer and provide transparency across industries.

“[Bitcoin has] captured the imagination of investors,” says Dave Abner, global head of business development at popular crypto exchange Gemini. He explains that, with a current market cap of around $900 billion, the volume of Bitcoin being bought and sold now is large enough that institutional investors see an opportunity to participate.

What Bitcoin Information Do Passive Investors Need to Know?

Above all, Abner advises consumers to figure out what type of investor they are and only buy Bitcoin if it fits into their long-term plans. He cites Warren Buffet, a well-known value investor, as an example of someone who has chosen to stay away from the crypto market because it does not align with his overall strategy.

“People have FOMO,” Abner explains. “FOMO” stands for “fear of missing out.” “Many people begin to wonder, ‘What am I missing?’ However, you should examine your portfolio” before investing in cryptocurrency simply because others are doing so.

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