The most important milestones.
In 2015, Bitcoin reached a market capitalization of around $3 billion, with a circulation of about 13 million bitcoins. Moreover, Bitcoin was increasingly being used as an online payment method, and the number of large companies accepting it as a payment method was increasing. Bitcoin also became more accessible to non-expert users, with the increase in the number of online exchanges and wallets that made it easier to purchase and use bitcoin. Additionally, several projects based on blockchain technology, such as Ethereum, were launched in 2015, expanding the possibilities of using the technology beyond simple currency exchange.
In 2016, Bitcoin reached new levels of mainstreaming and dissemination, with a significant increase in the number of users and companies using the cryptocurrency. Several financial products based on bitcoin were approved during the year, such as bitcoin futures, which allowed investors to trade bitcoin without actually owning it. Additionally, the Chinese government began examining cryptocurrency regulations, and Nobel laureate in economics Robert Shiller stated that bitcoin could be a “new form of currency”. However, 2016 was also marked by some concerns about bitcoin security, especially after the Bitfinex cryptocurrency exchange was hacked, and about $120 million in bitcoin were stolen.
In 2017, the adoption of bitcoin continued by large companies, such as Expedia, and attracted the attention of some financial institutions such as the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME), which began offering futures contracts on the cryptocurrency. In January 2017, the price of bitcoin was around $1,000. However, during the year, the price continued to rise, reaching a peak of nearly $20,000 in December. This growth was driven by a combination of factors, including the increasing adoption of bitcoin by large companies and financial institutions, growing interest from institutional investors, and increasing trust in cryptocurrencies in general.
2017 also saw an increase in cryptocurrency regulation initiatives in many countries, with authorities seeking to understand how to effectively regulate these digital currencies. However, despite these positive developments, the value of bitcoin underwent strong volatility during the year, with a series of sharp price declines. This led to increased caution by investors and a decrease in interest in bitcoin.
Overall, 2017 was a year of significant growth for bitcoin and cryptocurrencies in general, with a rising trend in adoption, institutional investor interest, and regulatory attention.
In 2018, the Chinese government banned Initial Coin Offerings (ICO), a form of funding that uses cryptocurrency, and closed some of the major bitcoin exchange platforms in the country. The US government began regulating crypto markets, with the goal of preventing money laundering and terrorism financing. It was later discovered that money laundering with Bitcoin is actually an ineffective strategy due to its complexity and high risks, while old financial institutions continue to be constantly sanctioned for this illicit practice. The scandal of laundering $881 million by HSBC is just one of the events that made headlines, also becoming an original Netflix documentary.
In 2019, Bitcoin suffered another drop in its value, falling to around $7,000, but adoption as a form of payment by large companies such as AT&T and Overstock.com continued. There were several important news stories that influenced the price of Bitcoin during the year, both positive and negative.
For example, in February 2019, the United States Securities and Exchange Commission (SEC) rejected a proposal for a Bitcoin-based Exchange-Traded Fund (ETF). This news led to a temporary decline in the price of Bitcoin, as many investors expected the approval of an ETF to open the doors to greater institutional adoption of cryptocurrencies.
On the other hand, in June 2019, the Fed’s chairman, Jerome Powell, stated that the US central bank has no intention of creating its own cryptocurrency, but also highlighted that the blockchain technology behind cryptocurrencies could have important implications for the financial system. In July 2019, the president of the European Central Bank, Mario Draghi, stated that the ECB has no intention of issuing a cryptocurrency, but also emphasized that blockchain technology could have important implications for the financial system.
In October 2019, Chinese President Xi Jinping expressed his support for blockchain technology, which led to an increase in the price of Bitcoin, as many investors interpreted these words as a signal that China was becoming increasingly open to cryptocurrencies.
Finally, in December 2019, US President Donald Trump expressed his opposition to cryptocurrencies, describing them as “based on nothing” and “very risky”. This news led to a temporary decline in the price of Bitcoin, as many investors interpreted these words as a signal that US authorities could become more restrictive towards cryptocurrencies.
Overall, 2019 was an important year for Bitcoin and the cryptocurrency market in general, as we saw increased attention and interest from institutions and governments, both positive and negative. This led to greater volatility in the price of Bitcoin, but also opened the doors to greater understanding and adoption of cryptocurrencies. In 2019, retail and institutional investors interested in cryptocurrencies also increased, with a growing focus on their use as an investment and payment method. Essentially, we saw greater maturity and understanding of these digital currencies by investors and institutions.
In 2020, the price of Bitcoin remained extremely volatile, with a low of around $3,800 and a high of around $29,000. This is mainly due to the fact that users, particularly retail investors, place great importance on circulating news, once again showing that they consider this technology as a “scratch and win” game without knowing its fundamentals. Nevertheless, let’s look at the most important news that influenced the price of Bitcoin during the year:
In January 2020, Twitter and Square CEO Jack Dorsey declared that Bitcoin is the future of currency and expressed his support for blockchain technology. This news naturally led to an increase in the price of Bitcoin. In March 2020, due to the COVID-19 pandemic, the price of Bitcoin and other cryptocurrencies collapsed along with stocks and commodities. This was caused by the global uncertainty generated by the pandemic and the need for liquidity by investors, who sold their positions in digital currencies to obtain cash. In May 2020, MicroStrategy’s number one, Michael Saylor, announced that the company had invested $425 million in Bitcoin, demonstrating that large companies are beginning to consider cryptocurrencies as a form of store of value. In September 2020, PayPal announced that it would allow its users to buy, hold, and sell cryptocurrencies, which opened the doors to greater adoption of cryptocurrencies by retail users, reaching a new all-time high of around $29,000 in December 2020.
Overall, 2020 saw an increase in institutional investor interest in cryptocurrencies, both as a means of investment and as a means of payment. Despite the volatility caused by the pandemic, the price of Bitcoin continued to grow at the end of the year, showing some resilience and proving to be an interesting asset for investors.
2021 has proven to be another important year for Bitcoin, with a significant increase in its value and greater attention from the media and investors. In January, the price of Bitcoin reached a new all-time high of over $41,000. This increase in value was partly attributed to the growing adoption of Bitcoin by large companies and institutional investors, as well as the increasing interest in cryptocurrencies in general. Throughout the year, several important developments took place in the world of Bitcoin. For example, in February 2021, online payment giant PayPal confirmed that it would begin offering cryptocurrency services to its users, allowing them to buy, sell, and hold Bitcoin and other cryptocurrencies through its online payment system. Additionally, in May 2021, e-commerce giant eBay announced that it would begin accepting Bitcoin as a method of payment on its platform.
Throughout 2021, there has been an increase in interest from governments and central banks in cryptocurrencies, with some countries beginning to explore their use as a means of payment or as an investment asset. For example, China announced the creation of its own digital currency, the Digital Currency Electronic Payment (DCEP), while the European Central Bank (ECB) expressed interest in using digital currencies as a means of payment and initiated a research project on their possible use. Nevertheless, Bitcoin and cryptocurrencies in general continue to be controversial, with some seeing them as a threat to traditional financial systems, while others view them as an opportunity for innovation and the decentralization of the financial system.
As we have seen, 2022 proved to be a year full of uncertainties but also opportunities. It will be important to continue keeping an eye on ongoing events to understand how the world will evolve. It was the year of the third major speculative bubble. The first two occurred in 2013 and 2017, both the year following the halving, with a price drop and a bear market.
In 2013, the price of Bitcoin went from around $10 to over $1,000 in less than 12 months, an exponential increase that led to a speculative bubble. In 2014, as a consequence, there was the first true year of a bear market in Bitcoin’s history. In 2017, the price of Bitcoin rose from $1,000 to $20,000, also in less than 12 months, a 2000% increase, a new speculative bubble, and in 2018 there was a bear market caused by the improper use of ICOs. In 2021, the bubble was not particularly pronounced, with a passage from about $10,000 to less than $70,000 in just under a year. 2022 tells us it was a year in which external events of particular relevance caused a new bear market similar to those of 2014 and 2018.
In both cases, the annual minimum peak was reached at the end of the year, with a loss of approximately 85% from the highs. Let us not forget that the current situation is very different from the past, the external context has changed and this could have a significant impact on the price of Bitcoin. It is important to keep an eye on developments and important announcements in the sector to understand how the cryptocurrency market will evolve.
Bitcoin and the cryptocurrency market in general have been considered much more volatile and unpredictable than the traditional stock and currency markets. The fluctuations in the price of Bitcoin have often been more marked and more frequent than those of other markets. It is important for investors to be aware of the volatility of the cryptocurrency market and adopt a long-term perspective, as market cycles can be unpredictable and price fluctuations can be significant.
The indications from governments and central banks on Bitcoin vary and depend on the country. In general, many governments and central banks have expressed concern that Bitcoin and cryptocurrencies in general could be used for illegal activities, such as money laundering and terrorism financing. For this reason, many countries have introduced regulations to regulate the use of these digital currencies and to ensure that they are subject to adequate controls. Other countries, however, have expressed a more positive attitude towards cryptocurrencies and are working to encourage their adoption and development. In addition, some central banks are exploring the use of blockchain-based technologies to issue and manage their own digital currency. However, it is important to note that Bitcoin and cryptocurrencies in general are still in a development phase and that the indications from governments and central banks may change in the future.