Bitcoin’s
first price was stated as worthless. Bitcoin has had a very volatile price history since it was first created in 2009. The digital cryptocurrency has seen a lot of action during its fairly short lifespan. Bitcoins were initially sold for almost 0. The first information about this price has been officially published by an exchange. The New Liberty Standard exchange published its first BTC/USD exchange rate in October 2009. At that time, 1 dollar was equivalent to exactly 1,309 BTC. The first real price spike occurred in July 2010, when the valuation of one bitcoin went from about $0.0008 to $0.08 for a single coin. Bitcoin, which is not worth more than a few cents, experienced a big jump in the following years and doubled its price. However, this jump took place exactly 8 years later. While Bitcoin was priced at penny values in 2010, it finished at the $6 level average in 2011. According to Forbes, interest in Bitcoin is growing, increasing the price by 150% in 2020. As of November 23, 2020, there were more than 18.5 million Bitcoins in circulation. Bitcoin had a market capitalization of about $340 billion and traded in the $18,000 per coin
When Did Bitcoin Start?
The idea behind Bitcoin was introduced to the world by a man named
Satoshi Nakomoto
on October 31, 2008, in the midst of the financial crisis. Nakamoto posted a message to his cryptography mailing list titled “Bitcoin P2P e-cash paper.” Inside was a link to a whitepaper called “Bitcoin: A Peer-to-Peer Electronic Cash System.” Both of these are still available online.
In these articles, Nakamoto introduced the Bitcoin cryptocurrency as a decentralized digital currency. Being centralized means that there is no single administrator, but a public ledger that anyone can keep on their computer. Bitcoin can be sent from user to user on the end-to-end Bitcoin network without the need for intermediaries.
Thanks to its distributed structure, Bitcoin’s network is open to everyone and can be followed by a strong upward movement against today’s financial order in a very short time and adds value to its value because it is seen as a safe haven by people. However, it is impossible to find out who the person performing the transaction is and between whom the transactions are made. Bitcoin transactions receive confirmation on the blockchain. There is no such thing as reversal or cancellation of the transaction that has been approved. This feature is available on the network 3. It keeps a person out of control.
Factors Affecting Bitcoin’s Price
Bitcoin’s price is not specifically determined by anyone. It is determined by the market. The pricing of cryptocurrency becomes more complicated because prices vary by trade. As an example, you can look up the price of Bitcoin on the internet and find two different prices. For example, you would have seen that the bitcoin price as of June 1, 2020 was $9,710.72 on the overall average of exchanges. However, other exchanges may have listed the Bitcoin price as $9,402.79 as of June 1, 2020.
One of the reasons for all the different values is where the data comes from. Bitcoin is never traded in one place. Instead, it is traded on multiple exchanges, which set their own average prices based on the trades made by the exchanges at a given time.
Indices aggregate prices from several exchanges and average them, but they don’t use the same exchanges for all index data. If you want to buy and sell Bitcoin, you should choose a specific exchange with an average price. Bitcoin’s price fluctuates at any given moment depending on which exchange the information is coming from.
Events That Could Change Bitcoin’s Price
The Bitcoin market is affected by many events. As in China, if it is leaked that a major government is undecided on how to regulate Bitcoin, the price could fall.
There are other factors that affect Bitcoin prices. Only a large number of bitcoins are available, and they are produced at a predictable rate. The ownership of these bitcoins is unevenly distributed – some Bitcoin giants have large amounts of money accumulated in their wallets (digital storage). This, coupled with liquidity, makes it easier for people to manipulate the market.
- The law of supply and demand: Anyone who has taken basic economics courses before immediately understands that Bitcoin, like other cryptocurrencies, complies with the Law of Supply and Demand. The supply of Bitcoin is comparable to that of Gold, because the total amount of Gold on Earth is known, as well as the predetermined maximum number of Bitcoins that can be put into circulation is also a certain amount.
- Media Impact: Various studies have shown that the media is the most important source of influence on the price of Bitcoin and other cryptocurrencies. Wider media coverage leads to a better understanding of cryptocurrencies and Bitcoin by the general public. This could potentially attract new people to cryptocurrencies.
- Political events: The change in the price of Bitcoin caused by political events is usually the opposite of what happens to central bank currencies. The lack of confidence in a country’s economy leads people to give it their chance and believe in cryptocurrencies instead of traditional currencies.
- Regulatory Changes Decided by Governments: Many governments have started to adopt bitcoin and other crypto coins and their infrastructure blockchain technology, and with the increasing demand, plans have started to be made in terms of regulation and areas that can be used in the future.
