2009 – The aftermath of the crisis two years ago. A complete novelty appears in the world of finance, an alternative to real money – Bitcoin (BTC). Some people hear the word “cryptocurrency” for the first time and it still arouses curiosity, which at the beginning did not promise anything great. Its beginnings, like many Internet projects, were not spectacular – a small number of users and a small number of operations caused its value to be close to zero.
When bitcoin was the cheapest it couldn’t be exchanged for a dollar. On the first of August 2010, its value was recorded at the level of $0.09. This state changed because cryptocurrency gave a sense of security and independence to the state authorities. It does not have an issuer, which in the case of traditional currencies (the so-called fiat) is the central bank.
Historical and current Bitcoin price
Bitcoin cannot be printed and due to the nature of cryptography, it can only be issued by its holder. With time, its popularity grew and with it its value – in April its value rose to the magical limit of $1.00. By many skeptical analysts considered to be the maximum possibility, but it turned out that this is only the beginning. Subsequent information and debates around the world only affected the popularity of the world. The Central Bank of China spoke about bitcoin – at first banning it and then considering it a possible means of payment.
2014 was also a favorable year – the BTC price oscillated around $352. At the time when bitcoin was the most expensive in its history, there was another breakthrough – Microsoft and PayPal giants accepted crypto payments. Such a turn of events resulted in the strengthening of bitcoin’s position on the world market and popular recognition. It was a breakthrough moment but also a moment of relative calm until the middle of 2016. This period can be called the stock market stagnation, which was shaken by the scandal in the USA – two DEA agents and the Secret Service embezzled funds allocated from the operating theft. This showed the dark side of the coin – can it be used for shady business in the future? Time will tell.
Elephant on thin legs
The fascination with virtual currencies was growing. With time, Etherum, Litecoin, Dash and others appeared on the market. The popularity looked endless, especially as the number of shops and service providers where they can be used was growing. Lack of control, anonymity, transfer speed and high security became the most important attributes of digital coins. In the consciousness of the owners of every good, there is a brand attachment – as in the case of a good car or clothes we bind certain features. In the discussed topic BTC is the leader – as a primus inter pares.
At the turn of 2016 and 2017 spectacular growths took place – mainly dictated by unlimited trust in the possibility of the most popular means of payment in the virtual world. On December 18, 2017 the highest value was recorded when bitcoin was the most expensive in its history – $19 498.63. Could anyone have predicted this a few years earlier? It’s hard to say, but then they were already wondering when the dangerously rising exchange rate would be stopped.
The first and the most drastic actions were taken in South Korea – the government declared that the situation on the markets is overheated (overvalued) and it requires the introduction of clear regulations. The statement of 28 December 2017 left no doubt about the intentions of the financial market regulators. It did not take long for the reaction to take place – the panic before the loss of value caused the price to fall, which triggered a further spiral. Facebook added oil to the fire by declaring that it would not be possible to pay for services in the form of BTC.
The speculative bubble broke… The fear of a decline in the value of virtual money was forged into real risk management of real money. Already in early January 18, the exchange rate stopped at $7,701, to continue downgrading throughout the following year. Currently, the bitcoin exchange rate fluctuates between $5,053 and $5,259 (data from January to April 2019). There is no indication that he will make a significant move. Experiences of sudden price changes have made potential investors look less favorably on digital coins.
They are undoubtedly looking for alternatives – also in the form of niche monetary units. For players who use market price averaging strategies, this is a dream Eldorado. Undoubtedly, the times of sudden changes will come, maybe the times when bitcoin was the most expensive will come back and it will not mean that it will say the last word on this issue.