By Tofiq Aliyev
On Oct 21, 2020
One of the questions that many people have been thinking about for a long time is how bitcoin suddenly became so valuable. Bitcoin is the first and most powerful cryptocurrency in the blockchain system with ingeniously designed, innovative features. In the early years of its emergence, the leading cryptocurrency had received a lot of positive talk with its features. Bitcoin had the potential to make an impact on the world economy, transform the current financial system, and eliminate third-party intermediaries.
But for almost nine years since its launch, there have been few signs that Bitcoin will become a mainstream payment method. Some people didn’t even know about this digital currency at all. Only a small fraction of its owners used Bitcoin as daily payment technology.
In this blog, we will examine how Bitcoin has become so valuable over the years.
Bitcoin, which entered our lives in 2009, has not been traded on any stock exchange for a year. On January 12, Nakamoto made the first Bitcoin transfer, after sending 10 BTC to Hal Finney. At this point, BTC had no value, and its price was equal to $0. The following year, the BTC price reached a maximum of $0.39. On May 22, 2010, the first real transaction took place on the BitcoinTalk forum, with a user named Laszlo Hanyecz paying 10,000 Bitcoin for two pizzas. For this reason, May 22 is celebrated annually by bitcoin users as “Bitcoin Pizza Day.”
In February 2011, on Mt.Gox exchange, Bitcoin(BTC) became equal to US Dollars for the very first time. The virtual currency, which slowly gains value, hit $31 in its first “bubble” and then experienced its first price drop. Then, bitcoin lost value more than 95percent and fell to as low as $2. In 2011, altcoins also started to emerge. Altcoins defining as Bitcoin’s alternatives. They are cryptocurrencies other than Bitcoin. Altcoins such as Namecoin, Litecoin, Ripple, and Primecoin appeared. During this period, bitcoin’s value began to rise from a steady level of $2 in December 2011 to an all-time high of $1242 until November 2013. In a few years, it dropped to $220, and this high volatility continued until 2017.
2017 has been a record year when everything has changed for Bitcoin in terms of price movement. Bitcoin, which traded at $900 in January 2017, reached its highest value ever $19,783 in December. At the same time, as well as Bitcoin, the price of Ethereum started to increase. Its price rose by 9000%. Just a few weeks later, Bitcoin’s price started to decrease in a short time. Between 2017 and 2018, more and more people were paying attention to bitcoin and cryptocurrency trading. Especially those in the mainstream financial world. Although 2017 is the peak of the Bitcoin price, it tries to increase value since then.
Over time, many exchanges began to open and make Bitcoin trading easier. With each new development, BTC has received more and more requests from investors. With the increasing demand, the price started to increase at the same rate.
The crucial factor in the Bitcoin price increase is the correction of many flaws in our current system of money transfers. As market participants saw the real uses and benefits of blockchain technology and the role of cryptocurrencies in powering this technology, cryptos get greater demand. Having a longer history than other cryptocurrencies, Bitcoin has become the most valuable currency of the crypto world. Besides, the limited supply made it more desirable compared to other currencies. Even if Bitcoin faces high volatility for many reasons, it seems that it will continue to maintain and even increase its market share.
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