Howmuch.net Visualising bitcoin’s wild ride in the last decade

Visualising bitcoin’s wild ride in the last decade

In February 2011, Silk Road became the first online store to accept bitcoin as payment. The new digital currency cost about one US dollar per coin. The next decade would be a roller coaster for bitcoin, not limited to the FBI shutdown of Silk Road

By Juan Carlos / First published at howmuch.net/articles/timeline-bitcoin-major-events

Starting at about US$1 000 in January 2017, the price escalated to a record high of US$19 783.21 per bitcoin on 17 December 2017. Just days later, however, the market experienced a 30% drop. Exactly one year later, on 17 December 2018, one bitcoin cost US$3 250. What can we expect at the beginning of the second decade of bitcoin exchange? ● The now-defunct Silk Road started accepting bitcoin as payment in February 2011. ● Nearly 850 000 bitcoins were stolen in the 2014 hack of Mt Gox, kicking off a two-year bear market. ● The price of bitcoin in 2017 skyrocketed from approximately US$1 000 to US$20,000 per unit. ● Bitcoin again lost nearly 10% of its value in under 24 hours amid the novel coronavirus uncertainty.

Our data comes from Bitcoinity, and includes the daily market capitalisation of bitcoin since July 2010. Market capitalisation – or market cap – is calculated as the total US dollar value of the bitcoin supply in circulation, times the daily average market price of bitcoin.

Our line chart shows the trend over time of the market cap. We have included some important events in bitcoin’s history to add context to the visualisation.

Bitcoin market cap by year 2010: US$1.4-million 2011: US$33-million 2012: US$143-million 2013: US$9.4-billion 2014: US$4.3-billion 2015: US$6.4-billion 2016: US$15.3-billion 2017: US$213.9-billion 2018: US$66.9-billion 2019: US$130-billion 2020: $160.7-billion (as at 5 March 2020)

While the origins of bitcoin go back to 2008, with its invention by the stillunknown Satoshi Nakamoto, it began to take real commercial value by the middle of 2010, when our data starts. Its price slowly climbed over the next two years, but a large run-up was ended abruptly by the 2014 hack of Mt Gox, the largest bitcoin exchange at the time. The collapse of Mt Gox set off a twoyear bear market and remains a scandal in the bitcoin world, as many of the nearly 850 000 bitcoins that were stolen have not been returned to their owners. While it would take until 2016 to recover its previous 2013 high, 2017 would bring an atmospheric rise in the price of bitcoin. Starting at about US$1 000 in January 2017, it escalated to a record high of US$19 783.21 per bitcoin on 17 December 2017. Just days later, however, the market experienced a 30% drop. Exactly one year later, on 17 December 2018, one bitcoin cost US$3 250: an 84% decrease from its peak. While bitcoin has not yet pierced US$20 000, its price increased by 87% in 2019, closing the year at about US$7 100. So, what does 2020 have in store for the cryptocurrency? Like many assets,

bitcoin has been awash in volatility among novel coronavirus fears. The digital currency recently lost 10% of its value in less than 24 hours, with much of the market also going into freefall. Some claim that Bitcoin can act as a safe haven in times of geopolitical unrest (such as a pandemic), but it’s unclear that COVID-19 has boosted interest in the currency. From this episode, it seems that as the market falls, so does bitcoin. However, bitcoin defenders remain confident about the asset tool as a hedge against market uncertainty and volatility. Explains entrepreneur Naval Ravikant, “Bitcoin is a hedge against central banks printing money, which is inevitable as a reaction to the novel coronavirus.”

While bitcoin’s 2020 performance to date may be adversely affected by the novel coronavirus, some bitcoin-lovers expect things to end on a high note: entrepreneurs John McAfee and James Altucher have repeatedly claimed the price of bitcoin will hit US$1-million by the end of 2020.

Bitcoin defenders remain confident about the asset tool as a hedge against market uncertainty and volatility. “Bitcoin is a hedge against central banks printing money, which is inevitable as a reaction to the novel coronavirus.”