The price of Bitcoin (BTC) has historically fluctuated between $0.04865 (July 4, 2010) and $68,789.63 (November 10, 2021). Bitcoin is so valuable because of its limited supply, long history, and growing popularity as an investment. The price of Bitcoin is formed in the market as a weighted average of the prices of the largest exchanges.
The price of Bitcoin follows the stock market more than is commonly believed. Bitcoin mining affects the price of Bitcoin, but less than before. Our Bitcoin forecast for the coming years is very positive.
Bitcoin (BTC) price history
The price of Bitcoin (BTC) has historically fluctuated between $0.04865 (July 4, 2010) and $68,789.63 (November 10, 2021). Bitcoin’s price history starts from July 2010. This information is based on historical data from CoinMarketCap.
Although Bitcoin was founded in January 2009, no Bitcoin exchanges or websites initially tracked its price. The popular CoinMarketCap lists Bitcoin’s price starting from July 2010, when its value was around $0.6.
In April 2011, Bitcoin’s price exceeded one dollar for the first time. In June 2010, it had already risen above 10 dollars! One hundred dollars was broken in March 2013, and in December of the same year, the Bitcoin price had already broken the 1000 dollar mark!
Bitcoin’s price history is full of cycles lasting about four years. Those investors who bought Bitcoin at the 1000-dollar mark had to wait over three years for the price to rise to reach 1000 dollars again.
The next price rally was seen in 2017, which ended at $20,000 in mid-December. This started another dark bear market, which found the bottom a year later, in December 2018. Investors had to wait again for three years before the old all-time high was breached next time. This happened in December 2020 when the price again broke through the 20,000 dollar barrier.
The graphic below shows the Bitcoin price history since 2010.
Many were expecting history to repeat itself at the end of 2021. The $69,000 price at the beginning of November seemed to be the first step towards $100,000 and the climax of the bull market. However, the opposite happened. The price of Bitcoin turned down. Many feel that the end of 2021 broke the so-called four-year cycle.
The Bitcoin price crashed in 2022. In the summer of 2022, it fell below the peak of the previous cycle for the first time. In December 2022, it was also lower than five years earlier on the same day for the first time.
The bear market of 2022 lasted a little over a year, as Bitcoin’s price turned upward in January 2023. The price broke $23,000 at the end of January and rose above $30,000 in March. A three-month-long consolidation started in March and ended in late June.
At the end of June, the price of Bitcoin started to rise sharply due to BlackRock’s spot Bitcoin ETF application. The BTC price rose to over 30,000 dollars but quickly turned bearish again, and the third quarter of the year was a big disappointment.
The last quarter of 2023 was great for Bitcoin. The price began moving in late October and rose to more than 44,000 dollars by December. At the end of December, Bitcoin mainly moved sideways. Bitcoin’s price closed in 2023 at just over 42,000 dollars, which means an annual increase of more than 150 percent.
At the end of 2023, Bitcoin received a major boost from the spot ETF boom and the end of the Fed’s interest rate hikes. The Fed’s monetary policy change caused Bitcoin and the stock market to run, and many indices ended up close to ATH levels.
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Why is Bitcoin so valuable?
Bitcoin is so valuable because of its limited supply, long history, and growing popularity as an investment. Its unit price is the highest on the market, and its market cap is also in a different class compared to others.
Satoshi Nakamoto has set a cap of 21 million units for BTC. No more Bitcoins will ever be created. An estimated 3-4 million bitcoins have also disappeared over the years, i.e., left the market.
At first glance, it might seem that 21 million bitcoins is a lot. Perhaps it was in the early years of Bitcoin when there were only a couple of thousand investors. Now, hundreds of millions of people are investing in Bitcoin. At its best, its market value has exceeded a trillion dollars, or 1000 billion.
When an asset of this size is divided into only 21 million parts, it is no wonder that Bitcoin’s value has risen to tens of thousands of dollars.
Many competing currencies have reserves of hundreds of millions or even billions. Certain meme coins intentionally devalue their currency by hundreds of billions for a low unit price, which attracts buyers.
The list below shows the Bitcoin exchange rate and the other major currencies on the market. As you can see, there are considerable differences in unit prices.
The second perspective is broader, i.e., why Bitcoin has any value, either a lot or a little. Bitcoin’s value is so high because it is a historically exceptional invention. After decades of trying, Bitcoin is the first globally successful decentralized digital currency. Since its early days, Bitcoin has also gained enormous popularity and a network effect.
Bitcoin has hundreds of millions of users, and its network is maintained by thousands of servers worldwide. Any such extensive network of actors would be worth a lot of money.
For investors, Bitcoin is also a globally known and immeasurably valuable brand. It is no wonder that its price is tens of thousands of dollars, and its market cap is almost as big as that of other cryptos combined.
How is the Bitcoin price formed?
The price of Bitcoin is formed in the market as a weighted average of the prices of the largest exchanges. When you look at the Bitcoin price on this page in euros or dollars, it is an average, not a quote from any individual exchange.
Due to the global and decentralized nature of the market, Bitcoin’s price must be built as a weighted average. The situation is completely different with traditional stock exchanges. A certain share is often quoted on one exchange, but it can also be listed on several different stock exchanges. If this is the case, investors make sure arbitrages are removed quickly.
The global Bitcoin market also works with the same idea. Even though Bitcoin can be bought from thousands of different exchanges, there are very few price differences. The image below shows the Bitcoin price on the largest exchanges. As you can see, the difference is only tenths of a percent.
The bull market often generates the most extensive arbitrage. For example, the local population in Japan and South Korea uses big crypto exchanges almost exclusively. The Bitcoin price may have been 10–15 percent higher in Korea compared to the global market. This is called the Kimchi Premium. The arbitrage can exist for quite a long time because few people can exploit it.
So, the global Bitcoin price on this page is a weighted average of the largest exchanges. The bigger the trading volume, the more weight the exchange gets. However, no one can buy bitcoins at the global rate. You buy bitcoins at the rate that the exchange you use has. It can be momentarily higher or lower than the global market price.
In addition, there may be small differences within the exchange depending on the trading pair. If you buy bitcoins with euros, dollars, or, e.g., USDT stablecoins, the Bitcoin exchange rate will probably differ slightly for each pair. However, the differences are marginal, and the ordinary investor should not worry about them.
The price of Bitcoin follows the stock market
The price of Bitcoin follows the stock market more than is commonly believed. Bitcoin has often been seen as an asset detached from the rest of the market, but its price has been correlated with stock market movements for several years.
In the early 2010s, the Bitcoin price still lived its own life. It was a very small asset class that was difficult for professional investors to buy. Mostly, a small group of amateurs and geeks interested in technology bought bitcoins. The exchange price fluctuated up and down regardless of the rest of the market.
Bitcoin entered the mainstream as an asset class during the 2017 rally. At the same time, it became easier to buy, and in recent years, various derivatives and other instruments have also entered the market. Wall Street has also taken its share of Bitcoin and entered the market.
This has led Bitcoin to behave much more like traditional asset classes. It is still considered a high-risk asset, indicating a correlation, especially with technology stocks.
In 2021, the narrative that Bitcoin is digital gold and inflation protection is still strong. However, the crashes of 2018, 2020, and 2022 have proven that the price of Bitcoin does not follow gold but technology stocks. It is a high-risk asset.
Therefore, the Bitcoin price will rise in a similar environment as other high-risk assets. This means liquidity, cheap money, and a positive mentality among investors, which has been enjoyed for the most part for the previous 10+ years.
Does mining affect Bitcoin’s price?
Bitcoin mining affects the price of Bitcoin, but less than before. Nowadays, mining is a very professional activity, and the mined coins are not sold immediately, reducing negative pressure on the Bitcoin price.
Changes in the Bitcoin price also affect miners. The 2022 bear market was a good example. Many listed mining farms have gone bankrupt due to the low BTC price and debt-financed investments during the boom.
In the early years of Bitcoin, the miners were smaller entities and sold their mined bitcoins to the market. Today, mining farms are hundreds of millions or billions of dollars in size and can hold their coins for years.
Will the Bitcoin price rise if the mining power of the network increases? This is an often-repeated claim. Bitcoin’s mining power, or hash rate, has been on the rise for years, even though the price of Bitcoin has gone in the other direction. Will the mining power ultimately drive the price or vice versa? Time will tell.
Bitcoin mining impacts the price, but the impact also works in the other direction. If the price of Bitcoin falls too much and for too long, it will force miners to sell more and more bitcoins… which will make the price fall even more.
An investor should look at Bitcoin’s hash rate development and be satisfied if it increases. This shows that many investors believe in the price rise in the long run and have invested billions of dollars in the infrastructure of the Bitcoin network.
Bitcoin’s Price Forecast
Our Bitcoin forecast for the coming years is very positive. We predict that Bitcoin will continue its winning streak and reach a price level of hundreds of thousands of dollars by 2030. What do we base this estimate on?
The 2024 US presidential election was a very significant milestone globally. The United States received a Bitcoin-friendly government, which, under the leadership of Donald Trump, wants to make the country the world’s Bitcoin hub. You can read more about the actions of the Trump administration here.
The United States is the world’s number one economic power, so its policies also impact the policies of other Western countries. The Trump administration has already announced that it will build a Bitcoin reserve, new regulations are being created quickly in the country, and the SEC, which oversees the securities markets, has stopped lawsuits against crypto exchanges.
Bitcoin mining is also growing and flourishing in the United States.
At the same time, new Bitcoin regulations have also been introduced at the EU level, and Bitcoin is increasingly appearing on the balance sheets of institutions and listed companies. Strategy, for example, has already purchased over 500,000 bitcoins and has gained many followers around the world. Bitcoin’s fundamentals could not be better!
It is still good to remember that Bitcoin will never be immune to macroeconomic cycles. We will continue to see volatility in the future, meaning that significant increases will also continue to be offset by large decreases. We believe the world will witness a million-dollar Bitcoin price in the 2030s!
