Wednesday, 14 April, 2021 at 07:57 GMT
According to coinmarketcap, bitcoin is trading at over $53 thousand. The BTC market cap is standing a little over $1 trillion, and it has a share of over 60%. Moreover, just a few weeks ago, Bitcoin was trading at $60k, owning an even larger market share. It is obvious, this currency is the most successful crypto asset and probably the best investment option of this century.
However, things have not always been easy for this currency. Since its inception in 2009 by Satoshi Nakamoto, Bitcoin faced multiple volatility issues causing its prices to grow and plummet in days. This write-up will discuss the highest BTC price jumps over the years and their causes.
3000% Growth and Later 1500% Drop in 2011
At the beginning of 2011, bitcoin’s price was $1. Around May, BTC was trading at $32, a 3100% increase. But what triggered this surge?
The first competition for BTC, i.e., Litecoin and Namecoin, were launched this year. The introduction of a competing factor set up the crypto world for the first true competitive market, contributing to the price fluctuations that year.
Moreover, there was growing interest in crypto, contributing vastly to the price surges of the crypto assets. However, although the price made serious growth, it crashed fast, returning to merely $2, a drop of over 93%. Again, the competition factor could have contributed to the drop in prices.
Huge Price Surge Between October and November 2013
Another bitcoin price surge appeared between October and November. The timeframe between October and November 2013 became one of the biggest Bitcoin price surges of this decade. Initially, the price was standing at $350 and surged to over $1400 on November 29th.
This sudden growth was one of the greatest shifts in the coin’s price set the pace for an even better future. According to various experts, this surge was due to the first halving, which occurred sometime in 2012.
The bitcoin halving is when Bitcoin reduces block rewards by half every four years to increase the long-term sustainability and reliability of the coins. This first halving increased interest in crypto, thus driving the growth in BTC price.
The 2017 Bitcoin Price Surge
The 2017 price fluctuation was the biggest price surge in bitcoin, showing great prospects. From starting the year under the $1k mark, the currency hit the $20k mark by the end of the year. There are multiple theories used to explain the price surge.
One theory is the Bitcoin halving in the previous year, reducing the BTC block rewards by half. It has since been common for BTC demand to increase during the halving period, driving a great surge in prices. This surge started happening at the start of 2017.
Towards the end of 2017, the prices surged even further, and another theory was used to explain these changes. Market manipulation! According to research done later in 2018, price surges in 2017 resulted from some manipulated trades by BTC market whales.
According to an expert financial fraud analyst, an independent currency named tether participated highly in manipulating the BTC prices. The fraud analyst John Griffin said that tether was used to purchase large sums of BTC when the currency’s prices were diminishing.
Purchasing large sums increased the demand for this coin, thus ensuring this currency maintained its value. Large trades create a notion in the market that BTC is in high demand, and the result is fast price gains. Eventually, the following year, 2018, Bitcoin suffered the worst price plummets in its history, crashing to even less than $4 thousand.
2018, A Devastating Year for Bitcoin
In the entire price history of Bitcoin, 2018 stands out as the most devastating year for bitcoin. Starting the year at super high values, BTC prices began plummeting at the beginning of the year, suffering the most devastating price loss. It dropped from nearly 20k to about 10k, and later 6k in the days to follow.
So what caused this plummet which was preceded by what is considered the second-best year for Bitcoin? Security was one of the contributing factors to the high decline in prices.
Coincheck, a Japanese exchange, was hacked and lost over $532 million. This hack made bitcoin holders concerned about their wealth’s security, and the demand dropped, causing price plummets. Lacking institutional support also caused further drops.
For instance, Jamie Dimo and Warren Buffet, famous investors, said some unkind words against bitcoin. Whenever trusted investors say such loathing words, the impact can be devastating to the investment asset, and so it was to bitcoin.
March 2020, An Astonishing Price Plunge
In March 2020, Bitcoin suffered another big decline when the unit price dropped by 50% in a matter of days. This token price fell to below $3600 from over $11k in the preceding days. What caused this particular plunge?
The main reason for this particular crash was the health crisis owing to covid 19. The corona pandemic did not just affect bitcoin but the whole financial market.
However, although Covid is the main reason behind the fall, analysts say that a loss of this magnitude was not due to the pandemic. Instead, Some Bitmex Bitcoin-related Future contracts worth $1 billion were liquidated, causing the fall.
The Recent BTC Bull Run
Of course, the biggest BTC price movement is the most recent price surge from just around 13k in November to an all-time high of $61.5k. This recent surge has led investors to realize supernormal profits in just five months. But what caused this price surge?
One factor is the Covid 19 pandemic. The long-term impact of covid 19 was increased demand of BTC because of its ability to hedge against inflation. BTC has been a haven for investments in the global financial market, thus attracting more and more investors and demand.
Another factor contributing highly to the recent Bitcoin bull run is last year’s slight drop in Defi. Investors had to migrate from Defi to BTC to protect against losses, and these migrations increased the prices and demand for BTC.
The increasing institutional support also contributes highly to the current BTC surge. For instance, last year, Paypal made it very easy to access BTC by supporting the asset. This institutional support has increased investors’ trust in the asset contributing to the demand and current bull run.
As it stands today, BTC prices are still ranging between $55k and $60k. According to market experts, this could signify yet another great BTC surge before the end of 2021. As corona continues to ravage businesses globally, BTC will be the best asset to protect wealth for this period and even in the further long term.
Although Bitcoin has seen some of the most devastating price plummets, the currency in early 2021 showed great prospects. For instance, it could surge in price from around $20k at the start, to past $60k in mid-march in a mere two months.
The reason behind this latest price boom is the customer demand for a reliable investment asset that hedges against inflation and offers long-term investment security. Looking at bitcoin’s performance, it’s true that although it’s super volatile, bitcoin can increase in value even further in the future.
It’s, however, important that investors know that even though the future for Bitcoin is great, they will still face lots of volatility issues along the way. ...