History of Bitcoin: The Underdog That Rewired FinanceBitcoin, a phenomenon that emerged at the onset of the 2008 financial crisis, has changed the way we think about money. To celebrate the token’s $73,000 milestone, we trace its origin story and look ahead into the future. To infinity… and beyond?
Table of Contents
A Financial Product Too Big to Ignore
Born in 2008 as the World’s First Cryptocurrency
The Very Early Days of Trading on Exchanges
The Volatile Phenomenon That Sparked a Change in Finance
A Place to Find Value in the Face of a Global Pandemic
Cryptocurrency Trading Lands on Wall Street
What’s Coming Next for BTC Price as We Move Deeper into 2024?
Bitcoin for Your Thoughts?
📍 A Financial Product Too Big to Ignore 📍
Bitcoin’s story is the story of an underdog that pushed through volatility and disbelief, but also dashed forward riding on hope and enthusiasm.
Bitcoin ( BTC/USD ), the world’s largest cryptocurrency, has so far managed to survive and overcome each one of its many pitfalls and obstacles thanks to its novelty, mystery, and investment appeal. Not only that, but the orange coin has progressed so remarkably, it has risen to rival the valuation of the world’s biggest companies.
As we’re about to close the first-quarter chapter of 2024, we take a closer look at what has fueled Bitcoin’s price to record levels about $73,000 a pop.
To celebrate the token’s historical milestone of $73,000 , we go back to its creation, tracing major development milestones. From wiping out billions of dollars from its valuation to logging stratospheric gains, Bitcoin’s history is nothing short of a miracle.
Today, Bitcoin boasts a valuation of more than $1.4 trillion. In other words, more than double as electric carmaker Tesla (ticker: TSLA ), founded by the uber-rich eccentric engineer Elon Musk.
With great power, comes great interest from Wall Street. A bunch of spot Bitcoin ETFs are now strutting among asset managers, finding their way to ordinary (and some degen) investors and money-spinning professionals alike.
📍 Born in 2008 as the World’s First Cryptocurrency 📍
The history of Bitcoin is relatively short. But it can sting. Because we were all playing games or being 8 years old instead of buying Bitcoin at 4 cents.
Back in 2008, the financial system crumbled under the pressure of a global crisis. A collapse in the housing market led to millions of homeowners not being able to cover their mortgage payments.
About that time, an individual—or a group of people—called Satoshi Nakamoto, concluded the banking system was not reliable. A new asset class emerged—one that did not need the intervention of banks to function.
Bitcoin, as it was called in the white paper released in November 2008 , was born. Essentially, Bitcoin represented a new type of money. An innovative software system that intended to rewire the worldwide financial system.
Bitcoin sprouted to life as an open-source software running on a peer-to-peer network called blockchain. One way to think of Bitcoin is to see it as an electronic form of physical cash without gatekeepers such as banks. The participants in the decentralized network are responsible for the verification of transactions, and all transactions are visible for the public.
📍 The Very Early Days of Trading on Exchanges 📍
Once it was born, Bitcoin stayed confined to a small network of only a few computers (and the early adopter group of ultra-niche geeks). Then, mining Bitcoin was able to get you hundreds or even thousands of coins in a few days’ time due to the low level of computing power required. Safe to say, the first people to play around with Bitcoin had no idea the tiny orange-themed gig will turn into a fire-breathing $1.3 trillion dragon.
Instead, the squad of core developers would try and make the network operate as smoothly as possible. Once this was achieved, Bitcoin hit its first exchange in 2010. The first Bitcoin to be transacted on an exchange was worth zero dollars. Then at the peak of 2010, one Bitcoin reached a record high of 39 cents.
Since then, the price of Bitcoin has experienced a wild ride as millions of people have onboarded the crypto bandwagon. Hundreds of exchanges have opened and traders today reach daily volumes of tens of billions of dollars exchanged in Bitcoin.
Bitcoin's mind-blowing price increase from its first steps through March 12, 2024 - Source: TradingView
📍 The Volatile Phenomenon That Sparked a Change in Finance 📍
It did not take much for Bitcoin to be noticed as a wonder of technology and a catalyst for change. Once it landed for trading on its first cryptocurrency exchanges, Bitcoin quickly gained popularity purely from an investment perspective.
The first traders would buy and sell the token in a matter of hours only to realize a small profit and savor the rush of adrenaline. This same speculative behavior could still be found today even after the stratospheric gains that have made Bitcoin a heavyweight in terms of valuation.
The price gyrations have crushed many traders and investors who were found unprepared to stomach the aggressive swings. Along the way, Bitcoin has endured over 17 selloffs of more than 30%. It has been through six declines of more than 60%, and four of more than 80%.
Still, after all these spectacular drops, Bitcoin has clawed back its losses and returned stronger than ever. So strong, it crushed all doom-and gloom forecasters and permabears when it blasted through the $73,000 threshold in March of 2024. Not long before that, Bitcoin had a chance to prove its worth as a safe haven in troubled times.
📍 A Place to Find Value in the Face of a Global Pandemic 📍
It’s important to mention that the current record high in the price of Bitcoin arrived after BTC’s previous peak of $69,000 in November 2021. Back then, the coronavirus crisis, which hit in March 2020, turned out to be a key period of growth for crypto.
The original digital currency served as a safe haven and a store of value—digital gold, if you like, or better—amid lingering uncertainty in the broad financial markets. In numbers, during the pandemic’s low point in March 2020, one Bitcoin was worth about $3,900.
Presently, a single Bitcoin is up more than 1,700% from its coronavirus-fueled meltdown.
The pandemic helped shift investor focus on the crypto market as participants sought to find pent-up value. The search has led to millions of Bitcoin proponents flocking to the digital asset. In practice, the interest to invest in Bitcoin has been so big, the top cop on Wall Street—the Securities and Exchange Commission—finally gave its nod.
📍 Cryptocurrency Trading Lands on Wall Street 📍
The big dogs on Wall Street welcomed the first Bitcoin-centric products to trade alongside stocks , bonds , and forex . More specifically, there are now eleven exchange-traded funds (ETFs) offering spot Bitcoin, or the real deal, unlike Bitcoin futures, which don’t hold genuine BTC. The step is a monumental milestone in Bitcoin’s path toward mainstream adoption and acceptance in the financial markets.
The eleven Bitcoin ETFs , approved by the Securities and Exchange Commission, were greeted by investors with billions of dollars injected. Giant asset managers such as BlackRock and Fidelity are seeing overflowing demand for Bitcoin from both institutions and retail investors.
The positive thing about these spot BTC ETFs is that they’re backed by the physical asset. Whenever inflows start to outpace liquidity, the asset manager needs to purchase new Bitcoin and add it to its reserves. The more the net inflow, the more it needs to buy BTC. And that drives prices higher.
From inception in January to March 2024, BlackRock’s BTC ETF hit $10 billion—faster than any US ETF ever.
📍 What’s Coming Next for BTC Price as We Move Deeper into 2024? 📍
Looking ahead into 2024, there is no doubt that we are going to see new bouts of volatility. More than that, many are optimistic we will continue to see a string of fresh records in the price of Bitcoin. With this in mind, the risks will be there too.
Both new and old, market participants need to know that price swings may be stomach-churning as the market adjusts to shifting moods in the rarefied air of $70,000.
Buying at the top is scary.
📍 Bitcoin for Your Thoughts? 📍
How did you first get exposure to Bitcoin? When did you buy your first piece of the crypto and are you brave enough to buy again at the top? Let us know in the comments!
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With 💖, TradingView Team
