Digital currency exchange trading started in the autumn of 2009.
At the time it was possible to get 1,309 bitcoins (BTC) for just 1 dollar. Throughout certain periods nobody showed interest in bitcoin exchange, consequently, its value remained unchanged. It was a kind of a “toy” given to tens of thousands of enthusiasts. And there were just a few who really believed in the project potential. In the past even not a very powerful computer left on overnight could generate hundreds of bitcoins to its owner by the morning. Easily acquired money could be spent without regret, for example, one weirdo Laszlo Hanyecz on May 22, 2010, bought two pizzas for 10,000 bitcoins! It was the first purchase of a real good with digital money.
Already in summer 2010 the bitcoin price reached 8 cents, but by the fall it went up to 50 cents. In 2011 the cryptocurrency hit the parity with the US dollar and began to fall, but late rapidly soared up to $ 30. Hereafter the faith in the new currency was undermined by numerous thefts and hacks. The stolen funds in BTC were immediately offered for sale on stock exchanges that also contributed to the rate drop. Throughout the 2012 bitcoin underwent a stagnant period, and by the 2013 it surpassed the $ 30 mark. From that point bitcoin continued to grow steadily and attained the trading value of $ 266. The collapse of Silk Road followed by FBI seizure of a large bitcoin amount provoked a sharp fall to around $ 100. Since then the digital currency price has never returned to the level of $ 100 or below.
November 2013 became “a moment of glory” for bitcoin. Within three weeks it jumped from $ 280 to an incredible mark of $ 1242! If at that time Laszlo hadn’t bought two pizzas and waited for three years, he would have sold 10 000 bitcoins at the peak of its price and saved $ 12, 420, 0000. During 2014 the value kept falling and by 2015 reached $ 177. In the mid of 2015 the digital currency was traded at about $ 400 per unit. The price remains at the same level in 2016 as well.
What are the main factors affecting the bitcoin trading value?
- Hacks of exchanges, mining companies and other entities result in a large influx of bitcoins to the market. Hackers try to sell them at any cost that leads to instant and drastic price reduction.
- Auctions of digital currency confiscated by the FBI and police. The supply exceeds the demand, and the price drops.
- Occasionally cryptocurrency exchanges get bankrupt which leads the loss of belief in digital currency. Users get rid of bitcoins regardless of its cost, thus, causing the rate to decline.
- Technical problems on the network, the bitcoin network attacks, and disputes over cryptocurrency further development among developers can lead to the value decrease.
- Reduction in the market supply determined by the digital currency algorithm contributes to the price scaling up.
- The higher popularity of bitcoin as the means of payment and savings, the greater its value