Bitcoin: A Price History of the First Cryptocurrency

What was Bitcoin’s starting price?

When Bitcoin started trading in 2009, its starting price was a minuscule US$0.0009.

On January 12, 2009, Nakamoto made the first Bitcoin transaction when they sent 10 Bitcoins to Hal Finney, a computer scientist and early Bitcoin enthusiast, marking a crucial milestone in the cryptocurrency’s development and adoption.

News of the cryptocurrency continued to spread around the Internet, but its value did not rise above US$0 until October 12, 2009, when a Finnish software developer sent 5,050 Bitcoins to New Liberty Standard for US$5.02 via PayPal Holdings (NASDAQ:PYPL), thereby establishing both the value of Bitcoin and New Liberty Standard as a Bitcoin exchange.

The first time Bitcoin was used to make a purchase was on May 22, 2010, when a programmer in Florida named Laszlo Hanyecz offered anyone who would bring him a pizza 10,000 Bitcoin in exchange. Someone accepted the offer and ordered Hanyecz two Papa John’s pizzas for US$25. The 10,000 Bitcoin pizza order essentially set Bitcoin’s price in 2010 at around US$0.0025.

Bitcoin’s price finally broke through the US$1 mark in 2011, and moved as high as US$29.60 that year. However, in 2012 Bitcoin pulled back and remained relatively muted.

Bitcoin’s price saw its first significant growth in earnest in 2013, the year it broke through both US$100 and US$1,000. It climbed all the way to US$1,242 in December 2013.

From that peak, Bitcoin’s price began to fall, and it spent most of 2015 in the US$200 range, but it turned around in December 2015 and began to climb again, ending the year at around US$430.

When did the Bitcoin price start to grow?

January 1, 2016, marked the beginning of Bitcoin’s sustained price rise. It started the year at US$433 and ended it at US$989 — a 128 percent value increase in 12 months.

That year, several contributing factors led to Bitcoin’s rise in mainstream popularity. The stock market experienced one of its worst first weeks ever in 2016, and investors began turning to Bitcoin as a “safe-haven” stock amidst economic and geopolitical uncertainty.

2016 also saw the Brexit referendum in the UK in June and the election of Donald Trump to the White House in November, both events that coincided with a bump in Bitcoin’s price.

Bitcoin continued its ascent, while various industries continued to take an interest in blockchain technology, particularly technology and finance. In February, a group of investors that included IBM (NYSE:IBM) and Goldman Sachs (NYSE:GS) invested US$60 million in a New York firm developing blockchain technology for financial services, Dig Asset Holdings. Bitcoin was trading at US$368.12 on February 2, down a bit from January, but two months later it was US$418.

In May the price of Bitcoin experienced a significant price increase, rising by 21 percent to US$539 at the end of the month. Its price went higher into June, peaking at US$764 on June 18. After that, it fell sharply and spent the summer in the high US$600 range. It dropped to US$517 on August 1 and started its climb all over again.

Microsoft (NASDAQ:MSFT) and Bank of America Merrill Lynch partnered for a finance transacting endeavor in September. Not much price movement was observed, but Bitcoin remained on a steady upward trajectory after that. In October, Ripple partnered with 12 banks in a trial that used its native digital currency token XRP to facilitate cross-border payments. Institutional investment bolstered investor confidence, and Bitcoin went from US$629 to US$736 between October 20 and November 20.

Bitcoin’s popularity continued into 2017, and it rose from US$1,035.24 in January to US$18,940.57 in December. Futures contracts began trading on the Chicago Mercantile Exchange in December 2017, and Bitcoin began to be more widely perceived as a legitimate investment rather than a passing fad. FOMO flooded the market. What ensued was a frenzy of media coverage featuring celebrity endorsements and initial coin offerings (ICOs) that spilled into 2018.

Regulators began to take notice and issued warnings and guidelines meant to protect investors and mitigate risks associated with digital assets, which only seemed to make people want them more.

Through it all, Bitcoin remained the “gold standard” of cryptocurrencies, yet its price was subject to extreme volatility. At the beginning of 2019, it was around US$3,800, it reached nearly US$13,000 in June, but by December 2019 Bitcoin was trading at around US$7,2000.

What factors led to Bitcoin’s rise in the early 2020s?

2020 proved a testing ground for the digital coin’s ability to weather financial upheaval. Starting the year at US$6,950.56, a widespread selloff in March triggered by the pandemic brought its value to US$4,841.67 — a 30 percent decline.

The low created a buying opportunity that helped Bitcoin regain its losses by May. The rally continued throughout 2020, and the digital asset ended the year at US$29,402.64, a 323 percent year-over-year increase and a 507 percent rise from its March drop.

By comparison, gold, one of the best-performing commodities of 2020, added 38 percent to its value from the low in March through December, setting what was then an all-time high of US$2,060 per ounce in August.

Bitcoin’s ascent continued in 2021, rallying to an all-time high of US$68,649.05 in November, a 98.82 percent increase from January. Much of the growth in 2021 was attributed to risk-on investor appetite.

Increased money printing in response to the pandemic also benefited Bitcoin, as investors with more capital looked to diversify their portfolios. The success of the world’s first cryptocurrency amid the market ups and downs of 2020 and 2021 led to more interest and investment in other coins and digital assets as well. For example, 2021 saw the rise of non-fungible tokens (NFTs), unique crypto assets that are stored, sold and traded digitally using blockchain technology.

Almost immediately following its record close above US$69,000 in November 2021, Bitcoin’s value began to fall once again. Market uncertainty weighed especially heavily on Bitcoin in 2022. During the second quarter of that year, values dived below US$20,000 for the first time since December 2020.

On May 7, 2022, Curve Whale Watching posted the first sign that confidence in Terra Luna, a cryptocurrency pegged to the US dollar, was waning after 85 million of its stablecoin UST exchanged for less than the 1:1 ratio it was supposed to maintain. This triggered a massive sell-off that brought Luna’s value down 99.7 percent and eventually resulted in the Terra tokens ceasing to be traded on major crypto exchanges.

Terra’s collapse had a domino effect on the industry as investors’ faith in crypto crumbled. In July, the Celsius network, a platform where users could deposit crypto into digital wallets to accrue interest, halted all transfers due to “extreme market conditions”, driving down the price of Bitcoin even further to US$19,047, a 60 percent decline from January 2022. In July, Celsius filed for Chapter 11 bankruptcy.

However, the biggest shake-up to the industry came in November when CoinDesk published findings that cryptocurrency trading firm Alameda Research led by Sam Bankman-Fried had borrowed billions of dollars of customer funds from crypto exchange and sister company FTX. Over a third of Alameda’s assets were tied up in FTT, the native cryptocurrency of FTX.

Once this news broke, investors withdrew their funds en masse, causing a liquidity crunch that collapsed FTX. Bankman-Fried was later arrested and sentenced to 25 years in federal prison on counts of money laundering, wire fraud and securities fraud.

Although Bitcoin was never implicated, the fallout of the FTX scandal led to a crisis of confidence across the sector and increased scrutiny from regulators and law enforcement. By the end of 2022, prices for Bitcoin had moved even lower to settle below US$17,000.