Since its debut in January 2009, Bitcoin’s price has been on a rollercoaster ride, but it has been trending upward over the long run. Although Bitcoin started a craze of cryptocurrencies, the public didn’t take it seriously.
This has been one of the most exciting trading opportunities in a long time. There is no surprise if you look at Bitcoin price history that it has made some millionaires, but many traders would have done better if they had held on.
Since November 2021, Bitcoin’s price has declined dramatically due to rising interest rates and reduced liquidity. Bitcoin was created by Satoshi Nakamoto in response to the global financial crisis, believing that it would free governments from monetary policies.
The limited supply of bitcoins makes cryptocurrency prices susceptible to skyrocketing. So, speculators are rushing into the market.
As the market shifts into greed, Bitcoin prices soar amid utopian promises, and speculators ignore the risks associated with an asset with no cash flow. When bad news or general market malaise occurs, sellers push down prices.
Major companies that introduced Bitcoin payment methods have quietly pulled them. The market has redefined bitcoin as a digital gold store. Meanwhile, Bitcoin hasn’t been around for a long time.
Here are some trends driving Bitcoin’s price.
January 2018 – December 2020: Bitcoin recovers and soars even higher
After the huge melt-up of 2017, Bitcoin spent most of 2018 in a downtrend, falling throughout the year, following a brief surge to start the year. By the end of the first quarter, Bitcoin was down nearly 50 percent from where it had started the year. It spent much of the year between $6,000 and $8,000 before closing 2018 at $3,709 – down 73 percent.
The year 2019 kicked off with more of the same as Bitcoin looked for direction. It tried to burst through $4,000 for the first few months but finally hit it in April and then rose to $5,000. May came, and Bitcoin reached $6,000, then $7,000, then $8,000 before settling back in early June. That month Bitcoin swiftly spiked to $13,000 before coming back.
By September, Bitcoin was back solidly under $10,000, and it continued to search for direction and fell until the end of the year, finishing 2019 at just under $7,200.
But with the turn of the calendar to 2020, Bitcoin picked up, rising over the next six weeks to above $10,000. Amid the stock market downturns during the initial COVID pandemic wave, Bitcoin wavered, falling to $8,000. Then during the drawdown, it plummeted on March 12, 2020 – from $7,935 to $4,826 in a single day, a more than 39 percent decline!
By early April, it was back above $7,000, then $8,000, and finally began pushing $10,000 in May. After dawdling for a couple of months, it eventually rose to more than $11,000 in July and $12,000 in August. It settled over the next few months, until October, when it pushed through $13,000 again and ultimately vaulted to nearly $20,000 in November 2020, as financial markets tore higher on liquidity from the Federal Reserve and the prospect of a COVID vaccine.
Bitcoin rose in December 2020 and closed out the year at $28,949.
January 2021 – January 2023: Bitcoin gets pressured
It’s hard to imagine a better way to end 2020 for Bitcoin than with a bang. Cryptocurrencies hit $64,000 by mid-April. Crypto and stock markets rose after the Federal Reserve promised seemingly endless liquidity.
After this big start, China warned cryptocurrency buyers that it would hurt the industry, which led to Bitcoin’s price dropping. Also, financial institutions and payment platforms are banned from using cryptocurrency.
The news caused Bitcoin to lose more than 50% of its value.
After that, China banned cryptocurrency transactions and foreign sites that offer such services. Those markets quickly shrugged off the news, and by October, the currency was back to over $60,000, and it hit $68,789 on November 10, 2021.
A few months ago, the Federal Reserve announced it’d stop buying bonds, slowly draining liquidity. A multi-decade high inflation rate has prompted the central bank to curb rising prices. As investors soon priced in an interest rate hike, the 10-year Treasury rate rose.
Cryptocurrencies and Bitcoin started falling in early November as high-growth stocks and risky assets lost liquidity.
Investors fled risky assets as inflation rose. The Fed started raising interest rates in March, which caused bitcoin to drop to under $16,000 in mid-2022. After months of bouncing around $40,000, bitcoin started falling. In mid-2022, high-profile blow-ups like FTX hurt traders’ confidence.
After traders started expecting a top in interest rates in early 2023, Bitcoin hit $20,000.