Bitcoin Price History Insights: 2009 To 2024

Key Takeaways

• Bitcoin’s price rose from near-zero in 2009 to over $70,000 by 2024.
• Major events in the last 15 years have been the Bitcoin Pizza Day, Mt. Gox hack, and ETF Approval by the SEC.
• El Salvador adopted Bitcoin as legal tender in 2021, boosting global interest at a country level.
• Bitcoin’s volatility highlights the potential to use the digital gold as a hedge against inflation and currency devaluation.

Bitcoin’s rise from fractions of a cent in 2009 to a trillion-dollar plus asset class in February 2021 has captured the world’s attention and confirmed Bitcoins role as a leading store-of-value asset. Understanding the historical context of Bitcoin’s price fluctuations is an interesting journey for investors to grasp in an effort to better understand Bitcoin. 

This article will break down Bitcoin’s price history, examining key milestones and moments from the genesis block in 2009, Pizza Day in 2010 to the ETF approval in January of 2024. 

Below is a full illustration of Bitcoin’s journey from its infancy to its teenage years over the span of approximately 15 years, referencing the four Bitcoin halvings that have already taken place in 2012, 2016, 2020 and most recently in April 2024.

The Genesis of Bitcoin (2009-2010)

The genesis of Bitcoin began in 2009 and marks the inception of the digital currency space. Bitcoin was created by the pseudonymous Satoshi Nakamoto and released to the cypherpunk community in the form of a whitepaper . Satoshi’s vision was to create a decentralized peer-to-peer currency that would eliminate the need for intermediaries. 

Bitcoin’s Creation By Satoshi Nakamoto

In January 2009, Nakamoto mined the genesis block, also known as Block 0. This event marked the birth of Bitcoin and the blockchain. Initially, Bitcoin had no monetary value and only cost the electricity required to mine the Bitcoin. It was an experiment in digital currency that would be embraced in the cypherpunk community. 

As more individuals joined the network, Bitcoin began to gain attention, but its price remained insignificant, with no established market for trading.

The First Recorded Transaction (Pizza Purchase)

On May 22, 2010, a programmer named Laszlo Hanyecz made history by conducting the first real-world Bitcoin transaction. He paid 10,000 BTC for two pizzas, an event now celebrated annually as Bitcoin Pizza Day. 

At the time, the transaction valued Bitcoin at roughly $0.0041 per coin. This transaction highlighted Bitcoin’s potential as a medium of exchange and marked its early and arguably, the first and most important step toward broader adoption.

Initial Price Discovery (Pennies Per Bitcoin)

Throughout 2010, Bitcoin began to be traded more frequently. The initial price discovery phase saw Bitcoin valued at pennies per coin. 

In July 2010, Bitcoin’s price reached $0.08, and by the end of the year, it had reached $0.30. This period of price discovery was characterized by high volatility and growing interest from early adopters who saw the potential for Bitcoin to become a new form of money.

Market Implications

The market implications of the first 3 years of Bitcoins existence as a monetary protocol included: 

• Novelty and skepticism: These early events underscored Bitcoin’s novelty, attracting both curiosity and skepticism from the broader public and financial experts.
• Early adopter mindset: The low initial prices and first transactions drew a dedicated group of early adopters willing to experiment with and invest in the new technology.
• The “digital gold” narrative begins: The successful transactions and rising prices began to shape the narrative of Bitcoin as “digital gold,” a store of value with potential long-term benefits.

Early Growth And Volatility (2011-2013)

The period from 2011 to 2013 was marked with large price volatility as Bitcoin began to gain more mainstream attention. During this time, Bitcoin’s price saw dramatic highs from 10s of dollars to the 1000s of dollars, reflecting both growing interest and the inherent risks of this new asset. 

This era was characterized by rapid adoption, regulatory scrutiny, and market speculation, leading to wild price swings.

Silk Road And The Dark Web

In 2011, Bitcoin gained awareness for its use case during its association with the Silk Road, an online black market where users could purchase illicit goods and drugs using Bitcoin. This association highlighted Bitcoin’s potential for anonymous transactions but also drew significant negative attention. 

Despite this negativity, the price of Bitcoin increased, hitting $31 in June 2011, before crashing to around $2 by the end of the year.

Mt. Gox Hack and Market Impact

In 2013, Mt. Gox, the largest Bitcoin exchange at the time, suffered a major security breach, leaving users to deal with theft worth millions of dollars in Bitcoin. This event had a huge impact on Bitcoin’s price, dropping from $266 in April 2013 to $50 shortly after the hack. 

The incident highlighted the security risks associated with holding digital currencies on exchanges. It also gave rise to the infamous statement “Not your keys, not your coins” or “not your keys, not your crypto ” expressing the belief that investors cannot be certain of the safety in the crypto holdings unless said holdings are stored in a secure wallet for which the individual personally holds the keys or private seed phrase. 

Bitcoin’s price showed resilience after the hack, rebounding to over $1,000 by the end of 2013, and the market continued to stabilize, attracting more legitimate interest.

Bitcoin’s First Major Bull Run (Late 2013)

Bitcoin’s first major bull run occurred in late 2013, driven by increased media coverage and growing public interest. 

Bitcoin started in 2012 at around $12, Bitcoin’s price rose to over $1,000 by November 2013. 

This increase began through speculative investments made and the increasing understanding of Bitcoin’s potential as a new asset class.

Market Implications

The market implications of the years between 2011-2013 marked Bitcoins initial tests and chaotic integration or price movements into society: 

• Increased regulatory scrutiny: The association with illicit activities and exchange hacks prompted closer association with Mt.Gox examination and regulation from governments worldwide.
• Growing legitimacy: Despite setbacks, Bitcoin’s resilience and price recovery began to create Bitcoiners who believe BTC to be a credible financial asset.
• Speculative investments: The price increases attracted a new wave of believers, traders, investors, gamblers and more who were individually driven by speculation and the potential for high returns.

Maturing Market And Institutional Interest (2014-2017)

The period from 2014 to 2017 saw Bitcoin transitioning from a volatile, speculative asset to signs of a maturing market, attracting institutional interest. During these years some major crypto exchanges maintained operations and the introduction of financial instruments like Bitcoin futures, and a massive bull run in 2017. 

These developments contributed to increased liquidity, trading volume, and mainstream acceptance of Bitcoin as a legitimate asset class.

Major Crypto Exchanges Established (Coinbase, Etc.)

During this period, several major cryptocurrency exchanges, such as Coinbase, were established and starting to be trusted, providing a more secure and user-friendly platform for buying, selling, and storing Bitcoin. 

The advent of these exchanges played a role in stabilizing the market and increasing accessibility to BTC purchases for both retail and institutional investors. 

Coinbase, launched in 2012 and became one of the most trusted and widely used exchanges offering insured custodial accounts, it helped alleviate some of the security concerns that exchanges like Mt. Gox introduced. 

As a result, Bitcoin’s price began to stabilize and show more consistent growth, reaching around $1,000 by the end of 2016.

Introduction Of Bitcoin Futures

In December 2017, Bitcoin futures were introduced by major financial exchanges like the Chicago Mercantile Exchange (CME)  and the Chicago Board Options Exchange (CBOE) . This was a huge moment, as it enabled institutional investors to participate in the Bitcoin market through a regulated financial product. 

The introduction of futures contracts provided a way to hedge investments and speculate on Bitcoin’s future price movements without directly owning the underlying asset. Following the announcement, Bitcoin’s price reached nearly $20,000 in December 2017.

2017 Bull Run (Bitcoin Approached $20,000)

The 2017 bull run was one of the most notable periods in Bitcoin’s price history. Starting the year at around $1,000, Bitcoin’s price increased to almost $20,000 by December. This rise was driven by factors, including increased media coverage, growing public interest, and the fear of missing out (FOMO) among investors. 

The price increase led to a huge influx of new investors and traders, further driving up the price. However, this period was also marked by high volatility, with dramatic price swings reflecting the speculative nature of the market at the time.

Key Developments

The market implications of the years between 2014-2017 marked Bitcoins reach into the mainstream and provided its ability to move in price significantly which attracted a new wave of investors: 

• Growing mainstream acceptance: Major crypto exchanges and the introduction of Bitcoin futures saw significant steps towards mainstream financial integration.
• Increased liquidity and trading volume: The trust in major exchanges and financial instruments led to higher trading volumes and market liquidity.
• “Fear of missing out” (FOMO): The price increase during the 2017 bull run was heavily influenced by FOMO, attracting a large number of new investors seeking quick profits.

Consolidation And Innovation (2018-2020)

The period from 2018 to 2020 was marked by an extended period of consolidation in the Bitcoin market. Following the massive bull run of 2017.

Despite this downturn, the ecosystem continued to innovate, and the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs) began to gain traction. Additionally, Bitcoin’s halving events continued to play a role in BTCs price dynamics.

Bear Market And Price Correction

The period between 2018 and 2020 was a difficult yet transformative time for Bitcoin. 

Following the dramatic highs of 2017, Bitcoin’s price fell by 83% in 2018, entering a long bear market that saw the BTC value drop to around $3,200 by the end of the year. This “crypto winter” marked by skepticism and uncertainty, left many questioning the long-term viability of Bitcoin.

The sentiment in the Bitcoin market between 2018 and 2020 was a whirlwind of emotions, reflecting the asset’s extreme volatility. In late 2018, at around $3,200, the mood was one of anger and depression yet moments of optimism when Bitcoin began a steady climb, eventually reaching around $12,000 by mid-2019. However, this optimism was short-lived. 

The start of the COVID-19 pandemic in March 2020 led to widespread panic across global financial markets. 

Bitcoin was not immune, and as fear gripped the market once more, Bitcoin’s price fell back down to around $3,400 in March 2020. The sharp decline was a true test to Bitcoiners as many were shaken because Bitcoin was meant to be a safe-haven asset. 

The sentiment oscillated between despair and hope as the market grappled with unprecedented uncertainty, ultimately finding renewed strength in the face of global monetary stimulus and the subsequent recovery and the entrance of Michael Saylor the CEO of Microstrategy.

The unprecedented levels of monetary stimulus during the Covid era and blatant money printing by central banks inflated the M2 money supply and the economic fallout from the pandemic highlighted the weaknesses of traditional financial systems. 

Saylor’s famous ice cube metaphor was understandable and relevant, because his rationale for investing $500 million of MicroStrategy’s cash reserves into Bitcoin of which $250 million was used to buy Bitcoin. Saylor likened holding cash in a savings account to watching a melting ice cube, emphasizing that with the Federal Reserve’s aggressive money printing and low-interest rates, the purchasing power of cash reserves was rapidly being eroded. 

By investing in Bitcoin, Saylor argued, MicroStrategy could preserve and potentially grow its wealth, protecting it from inflationary pressures. This period underscored Bitcoin’s appeal as a hedge against inflation and currency devaluation. 

Growth Of DeFi And NFTs

During the consolidation period, the growth of DeFi and NFTs emerged as significant innovations within the blockchain ecosystem. DeFi platforms, which offer financial services such as lending, borrowing, and trading without intermediaries, gained substantial traction. 

Development led to increased utilization of Bitcoin as collateral in DeFi protocols. Similarly, the rise of NFTs, unique digital assets verified on the blockchain, showcased new use cases for blockchain technology beyond traditional cryptocurrencies.

Halving Events And Their Impact On Price

Bitcoin’s halving events, occurring approximately every four years, reduce the block reward miners receive by half, decreasing the rate at which new Bitcoin is created. The 2020 halving event reduced the block reward from 12.5 to 6.25 BTC which played a role in Bitcoin’s price changes. 

Historically, halving events have been associated with price increases due to the reduced supply of new Bitcoin. Following the May 2020 halving, Bitcoin’s price began to rise, crossing $10,000 by mid-year. 

Market Implications

The market implications of the years between 2018-2020 was a difficult year for Bitcoin believers because the price increased and fell with huge volatility and in March 2020 the pandemic turmoil hit yet gave rise to inspirational figures like the CEO of Microstrategy Michael Saylor: 

• Importance BTC as a hedge against inflation: During 2020 there was significant monetary expansion coupled with low-interest rates, Bitcoin emerged as a hedge against inflation, offering a decentralized and finite alternative to traditional fiat currencies, whose purchasing power was increasingly at risk. 
• Expanding use cases for Bitcoin: Innovations in DeFi and NFTs demonstrated expanding use cases for Bitcoin, enhancing its role in the broader financial ecosystem.
• Long-term HODLing vs. short-term trading: The impact of halving events highlighted the benefits of long-term holding (HODLing) strategies over short-term trading amidst market volatility.

Global Adoption And Mainstream Recognition (2021-2024)

The period from 2021 to 2024 has seen Bitcoin achieve levels of global adoption never seen before possibly the real beginnings of mainstream recognition. 

Governments, institutions, and individual investors have increasingly spoken highly of Bitcoin, driving its integration into the global financial system. 

These years have been marked by milestones achieved, such as a country adopting Bitcoin as legal tender, institutional investments through the Exchange Traded Funds (ETFs) approved by the Securities and Exchange Commission (SEC) , in January 2024, and new all-time high prices prior to the fourth Bitcoin halving, which never happened prior, illustrating Bitcoin’s growing importance, recognition and influence in the world today. The price movements also indicate an industry where game theory works to the advantage of the network.

El Salvador Adopts Bitcoin As Legal Tender

In June 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender. President Nayib Bukele championed the move, aiming to increase financial inclusion and reduce remittance fees for the Salvadoran citizens. 

The Bitcoin Law, which took effect in September 2021, mandated the acceptance of Bitcoin alongside the US dollar for all transactions. The groundbreaking decision not only had a huge impact on Bitcoin’s price, but an increase in global interest which began sparking debates surrounding the role of Bitcoin being adopted by national economies. 

Initially, Bitcoin’s price saw a boost, reaching new heights as investors speculated on the potential for wider adoption by other nations.

Institutional Investment (MicroStrategy, Tesla)

Institutional investment played a pivotal role in Bitcoin’s mainstream recognition. Michael Saylor’s MicroStrategy continued to accumulate over 214,000 BTC  by 2024 and publicly endorsed Bitcoin as a superior store of value. 

Following suit, Tesla, led by Elon Musk, invested in Bitcoin and began accepting it as payment for vehicles, further legitimizing Bitcoin in the eyes of both retail and institutional investors. These high-profile endorsements influenced Bitcoin’s price, contributing to its rise to new all-time highs of over $60,000 in early 2021. 

The influx of institutional money illustrates the growing acceptance of Bitcoin recognized as a legitimate asset class and a hedge against inflation.

Price Volatility And New All-Time Highs

The period was also characterized by substantial price volatility, with Bitcoin reaching new all-time highs and experiencing sharp corrections. 

In November 2021, Bitcoin hit an all-time high of nearly $69,000, driven by a combination of institutional adoption, positive market sentiment, and the launch of Bitcoin futures ETFs. However, the market also faced significant corrections, influenced by regulatory crackdowns, environmental concerns over mining, macroeconomic factors and exchange scandals of FTX and celsius. 

Despite these problems, Bitcoin demonstrated resilience, maintaining a higher baseline price compared to previous years and continuing to attract long-term investors. 

Lessons Learned

• Bitcoin as a hedge against inflation: The influx of institutional investment highlighted Bitcoin’s growing role as a hedge against inflation and currency devaluation.
• Regulatory landscape evolves: The adoption by El Salvador and subsequent regulatory developments emphasized the need for a clear and evolving regulatory framework.
• The future of Bitcoin: The volatility and new all-time highs reinforced the importance of understanding Bitcoin’s long-term potential and its impact on global finance.

Conclusion

Bitcoin now stands at $71,000, reflecting its extraordinary journey of highs and lows over the last decade and a half, after the creation of its very first block in 2009 by Satoshi. 

With forecasts predicting Bitcoin will reach the six-figure mark, achieving this milestone will be an impressive achievement, considering Bitcoin began from virtually zero. 

As Howard Marks wisely said, “Investing is not about beating others at their game. It’s about controlling yourself at your own game.” emphasizing Bitcoins journey and the importance of patience and perspective when navigating a volatile market such as Bitcoin.

FAQ

About the Author

Andrew Kamsky

Andrew Kamsky is a writer and chart analyst, holding a degree in Economics and an ACCA certification. Andrew’s professional background spans roles at a Big Four accountancy firm, a fintech bank, and a chart analyst position at a listed bank focusing on foreign currency hedging. Beyond his financial career, Andrew is passionate about music, glass neon lights and travel.

See more

[email protected] LinkedIn Twitter Youtube