Bitcoin was developed in 2008 by a man called Satoshi Nakamoto, who is believed to be Japanese. He once stated that he started writing the code for bitcoin in 2007. The domain name for bitcoin and its website were registered in August 2008. In January 2009, Nakamoto made the first transaction with an early adopter of bitcoin. A year later, real-world transaction happened in Florida where a bitcoin miner paid 10,000 bitcoins for two pizzas.
The currency has become more popular over time; between the year 2012 and 2013, many retailers accepted it as legal currency. However, the currency has been experiencing bad exposure especially by people who use it to transact illegal business. For instance, in October 2013, Silk Road website was shut down by federal authorities for using bitcoins in black market transaction. Also, Mt Gox, which is a very popular cryptocurrency exchange in Tokyo, was declared bankrupt in 2014. It lost approximately 850,000 bitcoins, although it managed to recover some of them.
The exchange was very popular between 2010 and 2014; it was commanding around 70% of all bitcoin transaction during that time. Today, bitcoin is traded in exchanges such as Coinbase, which is one of the most popular non-centralized independent exchanges. In non-centralised exchanges, the prices normally differ among the different exchanges. Centralised exchanges on the other hand allow traders to have uniform price. Bitcoin started trading in early 2013, at around $13 per bitcoin.
In early April 2013, the price rallied to over $220, however, by mid-April it dropped to around $70. Bitcoin started to rally at around $100 in early October 2013, and by the end of that month it reached around $195. In early November, the price was around $200 and by the end of the month it was trading at around $1,075. The price started to be volatile at this period because Mt. Gox and miners in China started entering the market.
The market started to become nervous because traders thought that Mt Gox had poor security as well as management. Also, they claimed that withdrawing money from the exchange was very difficult for them. The price dropped from $1,079 on December 4, 2013, to around $760 by December 7, and this was a drop of approximately 29% in just three days. In January the following year, trading stabalized to around $920, but bitcoin experienced another major decline of about 32%. It dropped from $850 on February 4, to around $580 by February 16.
During this period, Mt. Gox exchange declared bankrupt and filed for bankruptcy protection in Japan. The currency continued to fall but in a very slow and gradual manner. However, the currency experienced a drastic fall from around $600 on July 15 to around $315 in January 2015. During the summer of 2015, the bitcoin price was a bit stable. It experienced a massive spike in early November of about 67% increase. On October 23, the currency was trading at around $275 but by November 4, it shot to around $460.
During the end of 2015, the currency was trading at around $360. In the whole of 2016, the currency was performing very well in the market. The currency was rising steadily from the beginning to the end of that year. In early 2017, the currency was trading at more than $1,000. Bitcoin spiked during the last months of 2017 as one bitcoin price went from $500 in October to a brief close of about $10,000 in November of that year, then doubled in December to about $20,000.
This price double was compared by critics and commentators to the Tulipmania which took place in Netherlands in the 17th century. However, just after four months, the bitcoin price fell rapidly as it was trading below $7,000 by April 2018. The price even fell further in November to less than $3,500. This was more than 50% decline in just a few months.
Bitcoin started to experience a steady rise in price from January to June 2019. In June, the price of bitcoin was around $10,000 but it crashed again all the way down to $7,000. History seems to repeat itself since in the beginning of 2020, the price was about $10,000 but fell to around $5,000 in March. However, the price of the currency has been recovering steadily since that time.