The remarkable ups and downs of Bitcoin
Bitcoin has had a tumultuous history on its way to becoming the world’s leading cryptocurrency, writes Tom Woodcock.
When launched in 2009, Bitcoin had no exchange rate or value: an initial attempt to auction 10,000 BTC – worth $600m in April 2021 – for $50 failed as no buyer could be found. The first real-world transaction was in Jacksonville, Florida, in May 2010, when two pizzas were bought for 10,000 BTC – a Bitcoin being then valued at $0.01. By April 2011, Bitcoin finally reached parity with the US dollar.
The first major peak took place as a result of the 2012-13 Cyprus financial crisis: the value of one Bitcoin skyrocketed from $1 in April 2011 to $1,242 in November 2013. Why? Because the Cypriot banking system was collapsing, and the terms of the EU bailout meant that Cypriot banks could have their deposits taken over by the EU – so they moved them into Bitcoin.
Despite a slight dip in April 2014, the value of Bitcoin reached $2,000 in May 2017 and an astronomical $19,700 on December 17, 2017. But the new currency could not shake off the first rule of the markets – what goes up must go down – and, on December 22, 2017, bitcoin lost one third of its value in 24 hours.
In February 2018, it fell by 50 per cent in 16 days: by December 2018, the value had dropped to $3,300.
Bitcoin’s value yo-yo’d during the Covid-19 pandemic, but by mid-2020 it had smashed its previous record value, and was trading in excess of $41,000.
After Elon Musk and Tesla announced investments into Bitcoin in February 2021, the price once again surged and, by April this year, the value was in excess of $60,000.
Yet more chaos was just around the corner: after the Chinese government’s cryptocurrency crackdown and rumours that Tesla would sell up its Bitcoin holdings, the value dropped below $30,000 in May this year.
It has since recovered and one Bitcoin is currently worth $33,000.
- See this week’s Cambridge Independent for an interview with Solidi founder Jamie McNaught, following the Cambridge company’s approval from the FCA for its cryptocurrency exchange platform.