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On May 22, 2010, crypto miner Laszlo Hanyecz traded 10,000 of his bitcoins for two Papa John’s pizzas. It was the first real-world cryptocurrency transaction in history.
Only a little more than a decade later, those same 10,000 bitcoins would be worth $391.7 million at the cryptocurrency’s price as of March 10.
The Price of Bitcoin Over the Years
The price of bitcoin over the years has gone from being worth less than a penny to being worth a brand-new Lexus NX 250 — all in less than 15 years.
Bitcoin Prices in 2009-2015: The Early Years
When mystery person(s) Satoshi Nakamoto developed bitcoin in 2008, it didn’t have a standard value or price. Cryptography hobbyists who began mining bitcoin in 2009, upon the launch of the blockchain, used it to barter, exchange and settle bets and challenges with each other online.
It never had a fixed value until that monumental day in 2010, when Laszlo Hanyecz offered his self-mined stash of bitcoins to anyone who could get a couple of pizzas to his house the fastest.
Since the pizzas were valued at about $25, according to U.S. News & World Report, the nascent crypto community agreed that a single bitcoin should be worth a quarter of a penny. It was a defining moment in the history of bitcoin prices — the cryptocurrency now had an agreed-upon value.
In July 2010, a few months after the now-famous pizza standard was set, bitcoin hit the open exchanges like the now infamous and bankrupt Mt. Gox. On exchanges, the cryptocurrency could be easily bought, sold and priced against the U.S. dollar. It opened with an asking price of $0.0008. That’s eight 10,000ths of a dollar. The wild ride of the coming decade would start almost immediately. By the end of the month, bitcoin’s price had soared to $0.08 — eight whole pennies.
February 2011 was a milestone for bitcoin, which breached the $1 mark that month. Then, something that would come to define bitcoin investing happened for the first time — a bubble formed. By June, just a few months later, bitcoin had soared to around $31 before the bubble did what bubbles do. It burst, and the price flopped back down to single digits.
Another watershed moment came in 2013. Bitcoin started the year trading at around $12, according to Forbes. By the end of November, that number had vaulted to $1,242, an incredible record high for bitcoin, which at that point was trading at almost exactly the same price as an ounce of gold. Prices later fell back down to the low triple digits and stayed there — until they didn’t.
2016-2020: Dot-Com Comparisons
In 2016, bitcoin moved into the high triple digits, and at the very start of 2017, it broke $1,000 again.
In a run that drew comparisons to the dot-com bubble of the late 1990s, it took off and never stopped until it peaked on Dec. 16, 2017, at $19,497.40. It was yet another bubble. Prices soon collapsed to under $10,000, bottoming out in the low $3,000s at the end of 2018 and the start of 2019.
In 2019, prices briefly breached $10,000 again before fizzling into a low four-figure lull. Then the 2020 pandemic came. COVID-19 made the discreet, secure and decentralized bitcoin a hot commodity that continued to get hotter and hasn’t cooled off to 2019 levels since.
Bitcoin started 2020 at $7,200. By mid-summer, it was back into five figures, where it remains to this day. By the middle of December, it had passed the 2017 record and was trading in the $20,000s for the first time.
2021 and Beyond
Bitcoin was trading at just over $32,000 when markets closed on Jan. 2, 2021.
In a Feb. 8, 2021, Securities and Exchange Commission filing, Tesla announced it had purchased $1.5 billion in bitcoin the previous month and expected to begin accepting bitcoin as payment for its products in the near future. By the end of the day, bitcoin’s value had surged nearly 19%, to $46,196. It hit $50,000 for the first time about a week later, on Feb. 16.
Bitcoin had already breached $61,000 and fallen back over to $54,738 when Tesla CEO Elon Musk announced in a tweet on March 24, 2021, “You can now buy a Tesla with Bitcoin.” Within days, bitcoin prices began an upward trend, settling in the upper $50,000s.
Again, the bubble was destined to burst. Citing “rapidly increasing use of fossil fuels for bitcoin mining and transactions,” Musk announced in a May tweet that Tesla had suspended vehicle purchases using bitcoin. The coin received another blow that month when China cracked down on cryptocurrency mining and trading and announced that regulators would investigate cryptocurrency and power usage, Reuters reported at the time. The one-two punch cost bitcoin 37% of its value that month.
Bitcoin entered another bubble phase last year, reaching its highest-ever price of $68,789.63 on Nov. 10, 2021, and finished the year up almost 70% since the beginning of the year, CNBC reported. Again, the rally was short-lived.
Bitcoin had slumped into the $30,000-to-$40,000 range again by late January, and that’s where it currently sits. Some analysts think it has further to go. Carol Alexander, professor of finance at the University of Sussex, told CNBC that she expects bitcoin to fall below $10,000. The volatility stems from what she views as bitcoin’s lack of intrinsic value, Alexander said.
But not everyone agrees. In an October 2021 interview on CNBC’s “Squawk Box,” Jurrien Timmer, director of global macro at Fidelity Investments, said that while he knows better than to make bold price predictions, his supply and demand models indicate that bitcoin prices could hit $100,000 in the next couple of years.
Good To Know
Bitcoin has a maximum supply of 21 million coins. Nearly 19 million are currently in circulation, leaving just over two million left to be mined.
An Analysis of the Price of Bitcoin Over the Years
Bitcoin’s price history is a story of extremes. The first extreme is obvious — astronomical growth. In gains that are truly hard to grasp, bitcoin started at $0.0008 and rose to nearly $70,000 in just over a decade.
The second extreme came in the form of volatility. The decade was peppered with massive bubbles that, when burst, triggered free-falling prices that then floated sideways for years on end until the next bubble formed. That pattern started in 2011 and has repeated itself every few years.
What Has Influenced Bitcoin Prices?
Those speculative bubbles seem to have formed around times of crisis, fear and uncertainty. Bitcoin was developed in 2008 as an alternative to the traditional financial system at the height of the Great Recession.
A bubble formed around the election of Donald Trump, another formed around his impeachment, and the biggest of them all came during the biggest crisis of all — the pandemic. It remains to be seen whether Russia’s invasion of Ukraine will have a similar effect.
Drama in bitcoin’s early years made the ride a whole lot bumpier, as well. Ponzi schemes and other frauds that had nothing to do with bitcoin, like BitConnect and OneCoin, had ripple effects felt by all cryptocurrency investors.
The Mt. Gox Catastrophe Changed Everything
The first, biggest and best-known exchange, Mt. Gox processed 70% of all bitcoin transactions. In 2011, the first in an endless string of scandals erupted when a hacker broke into the now-infamous bitcoin wallet and transferred tokens out of user accounts.
The price of bitcoin collapsed as new thefts and hacks were revealed. Legal troubles mounted, the government got involved and Mt. Gox finally declared bankruptcy in 2014.
In total, 740,000 bitcoin worth nearly $29 million in today’s money was lost. Bitcoin and cryptocurrency in general lost mainstream credibility and earned a rep as a shady, insecure and speculative investment in many circles.
The Law of Supply and Demand
Some cryptocurrencies have no cap on the number of coins that can be created, and others have caps so high as to be meaningless in terms of scarcity. Not so with bitcoin. The relatively low supply limit and decreasing number of new coins left to be mined — coupled with the institutional support that has helped cement bitcoin’s position as cryptocurrency’s gold standard — have kept demand strong relative to supply.
FAQ: The History of Bitcoin Prices
When it comes to the cost of crypto, these are the questions many investors are asking.
- What was the original price of bitcoin?
- Zero dollars. In the early days, bitcoin was mined, traded and exchanged informally almost exclusively by cryptography hobbyists. There were no exchanges or exchange rates until it started trading for fractions of a penny in 2010.
- What was the highest price of one bitcoin?
- On Nov. 10, 2021, BTC reached an all-time high of $68,789.63.
- When did bitcoin cost $1?
- Bitcoin achieved parity with the U.S. dollar for the first time in February 2011.
- What will bitcoin be worth in 2030?
- Bitcoin, like all cryptocurrencies, is highly speculative. It’s impossible to predict how much it might be worth in the future.
- As CoinDesk points out, bitcoin could topple and replace fiat currency, become the dominant digital currency or replace credit cards — but it could also collapse and be replaced by something else, be regulated or taxed into irrelevance or lose out to a competitor.
Takeaway
During its short, 14-year existence, bitcoin has outperformed the stock market, the housing market and precious metals by a long shot during one of the greatest runs of any investment in history. It has been a wild and unpredictable ride characterized by super-inflated bubbles and steep crashes, but those who could stomach the roller coaster watched a fortune grow out of a pizza.
Bitcoin Price History 2009-2022: What Investors Need To Know
2022-03-11 08:01:52
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