Happy Halloween! Also, Happy Birthday Bitcoin! Today marks the 10-year anniversary of the foundations of Bitcoin, the world’s first cryptocurrency. Bitcoin has definitively changed the definition of what can be considered an asset in financial markets. Today, we are proud to give you a brief Bitcoin 10 year anniversary review.
10 years ago, Satoshi Nakamoto, Bitcoin’s founder, published a nine-page long academic style paper called “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper would go on to act as the founding texts, a white-paper of sorts, for the cryptocurrency. This paper was the triumphant prelude to successful Bitcoin transactions being carried out a few months later in 2019.
It is impossible to gauge how much Bitcoin has increased in price since its earliest incarnation. This is due to Bitcoin’s value being literally fractions of cents. But let’s start with $0.01, and today’s rough point of $6,300.00 per coin – this represents Bitcoin’s value increasing more than 1 million fold in the last decade. 100 dollars invested in Bitcoin at $0.01 would have you seeing 63 million dollars.
2008-2010: Infancy
The first Bitcoin transactions were carried out in private. But the first transaction is believed to have been between Nakamoto and developer Hal Finney. Many have speculated on the identity of the mysterious and still-unknown Satoshi Nakamoto – many believe that Finney, who died in 2014, was Nakamoto himself.
The adoption of Bitcoin grew slowly at first. It wasn’t on a lot of people’s radar until May 22nd, 2010, a day that has been dubbed “Bitcoin Pizza Day”. On May 22nd, 2010, Laszlo Hanyecz, a Bitcoin enthusiast, purchased 2 Papa John’s pizzas for 10,000 Bitcoins. Had Laszlo purchased the pizzas with cold cash and kept those 10,000 Bitcoins and didn’t do anything with them until today; they would be worth $63 million dollars today.
2013-2016: Mainstream Intrigue
Bitcoin continued to slowly attract interest, but what caught the public’s eye due to several hyperinflation incidents. In late 2013, Bitcoin spiked from $100.00 per coin to $1,000 in just over a month. Then it halved in value over the next 3-4 months. Bitcoin would not see $1,000 again until 2017 (last year, crazy isn’t it?)
Business Insider’s Joe Weisenthal, up until that point, was a Bitcoin detractor. A few weeks prior to the astonishing move up to $1,000, he had penned an op-ed calling Bitcoin a “currency for clowns”. He published a mea culpa shortly after this move up titled “I’m Changing My Mind About Bitcoin”.
During 2013-2016, Bitcoin stayed in a range of around $400.00. It never went over $650.00, and slightly dipped to below $250.00. It was during this time that Mt Gox, the first ever exchange, filed for bankruptcy protection after hackers stole almost $500 million dollars of Bitcoin, and nearly $30 million in cash deposits.
Have you heard of Bitcoin and Cryptocurrency as the Wild West asset? Mt Gox’s hack, the largest hack to this day, exposed security flaws and helped cement that reputation for Bitcoin.
2017: Bubble?
After 3 years of relative calm, going from a range of $250.00 to $650.00, Bitcoin hit the mainstream. Bitcoin popped from around $1,000 per coin to nearly $20,000 per coin in a matter of months. Even in early 2017, the top 100 coins were still very cheap.
Part of the enthusiasm for this jump in price was the Bitcoin “Fork”. This “fork” resulted in Bitcoin Cash, a cryptocurrency that was pushed for by Chinese developers after they decided to split Bitcoin’s original code. For every 1 Bitcoin that you owned or held in a wallet, you would receive 1 Bitcoin Cash. This was no doubt instrumental in Bitcoin’s move up the charts.
2017 also saw the first major public efforts from traditional financial institutions to get involved in cryptocurrencies. The Chicago Mercantile Exchange (CME) and the CBOE both created platforms for customers to trade Bitcoin Futures. Numerous major banks also announced projects involving crypto, such as XRP/Ripple, which helped fuel the expanding price of Bitcoin and cryptocurrencies.
Bitcoin’s bubble popped just before Christmas, just a couple of weeks after futures were launched. By the end of January 2018, Bitcoin’s price had fallen from almost $20,000 per coin to just $10,000.
The stunning capitulation of Bitcoin and the cryptocurrency market, which had neared almost $1 trillion dollars, was driven in part by rising fears of regulators stomping into the space to crack down on cryptocurrency.
This fear led to Bitcoin stabilizing at around $6,000 – $7,000 per coin, a range Bitcoin has held since June. The volatility of 2017 and early 2018 has all but evaporated except maybe in the alt-coins.
Wences Casares, widely known as Bitcoin’s “Patient Zero” for his role in dramatically drumming up interest in Silicon Valley, expressed worries about its future. “It may work, it might not work. We are in the equivalent of 1992 for the Internet”, he told Bloomberg.
What do you think? When did you get involved with Cryptocurrency and Bitcoin? We’re in this for the long term. Institutions are coming out to play. ATMs will have the capability to allow everyday people to buy small increments of Bitcoin. Merchant Adoption is being critically examined by major point-of-sale companies. We have plenty of reason to be bullish. Are you? Let us know on our Facebook page!
