Bitcoin halving is expected to take place on May 12, what does it mean for the BTC price? Which events were followed by the movements and how two previous halvings affected the price? BTC price history in today’s throwback.
Throwback Thursday by BTCMEX
Bitcoin - the first blockchain-based cryptocurrency in the world is considered to be the most widespread and successful. The Bitcoin maximalists see it as the new safe haven amid the coronavirus-related economic crises, yet the digital asset remains drastically volatile. Over its short history - only 10 years - it has seen major rallies and crashes.
Bitcoin went online in January 2009, when its creator - Satoshi Nakamoto - mined the first, so-called Genesis, block with the reward of the first 50 BTC. The first public trade of Bitcoin took place on April 25, 2010. 1,000 Bitcoins would go for 0.3 cents each coin.
The increase in value hasn’t been seen for a year until July 2010, when the price of a coin went up to $0.08. Many link the price movement with the first real-world use of the cryptocurrency that happened two months earlier. In May 2010, a Bitcoin miner bought two pizzas for 10,000 Bitcoins, which at that time was approximately $25. The first well-known cryptocurrency exchange Mt.Gox was established the same year, and over time Bitcoin gained wider exposure among retailers.
Bitcoin rallied for the first time in summer 2011, after Forbes profiled the technology in the article “Crypto Currency”. The value of one coin increased up to $10. Soon after, Gawker revealed the Silk Road - the darknet marketplace accepting Bitcoin. On June 9, 2011, BTC peaked at $29.57, but the crash occurred soon. On June 19, Mt.Gox announced its database had been compromised and user information leaked. The price of the cryptocurrency started sliding down. Bitcoin was traded under $5 by the end of the year.
The Bitcoin obituary named “The rise and fall of Bitcoin” was published by Wired in November 2011, which has driven the attention of professional traders, who started investing in the digital asset. Bitcoin really started the take-off in 2013. The price rallied from $13 to $220 and dropped to $70 in mid-April.
Another spike took place in 2013, after the first halving, which occurred in November 2012. The block reward for mining was reduced to 25 BTC. The price went from around $200 to over $1,075. The rally was caused by new bitcoin exchanges and miners in China entering the marketplace. The differences in the prices among the different exchanges also lead to arbitrage opportunities.
Bitcoin started getting very volatile and rumors around Mt.Gox's lack of security measures and poor management arose. Mt.Gox filed bankruptcy in early 2014, and BTC value started declining gradually from $920 (January 2014) to $600 (July 2014), and $350 (early 2015).
The second Bitcoin halving that cut the mining reward to 12.5 Bitcoins per block occurred in July 2016 and is believed to drive the BTC price to its all-time high of $20,000. Through 2016 Bitcoin steadily rose, breaking through $1,000 in early 2017. In October of that year, the price broke through $5,000 and doubled again in November to $10,000. Then, in December, the price of one Bitcoin reached nearly $20,000. The rapid value increase created a price bubble that is often compared with the Tulipmania. A few weeks later Bitcoin fell under $7,000.
The “Crypto Winter” started in 2018, with the BTC price crashing to $3,000 by November.
Bitcoin burst back to $10,000 in June 2019, was trading sideways and saw its ups and downs throughout the year. Bitcoin entered 2020 with the $5,000 market crash in March. Bitcoin's value has been historically quite volatile. Experts name some of the reasons such as bad market news, security breaches, uncertain future of the asset, large currency holder risks, and absence of regulations.
The cryptocurrency pioneer is currently trading at around $9,000, and the Bitcoin community is anticipating the third halving to happen on May 12, 2020.
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Please, note, that the article is a part of BTCMEX Blog, the views and opinions expressed here are the contributing author’s only, and do not necessarily represent the views of the company.