In February 2011, Silk Road became the first online store to accept Bitcoin as payment. The new digital currency cost about one U.S. dollar per coin. The next decade would be a roller coaster for the digital currency, not limited to the FBI shutdown of Silk Road. 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 $1,000 to $20,000 per bitcoin.
Bitcoin again lost nearly ten percent of its value in under 24 hours amid coronavirus uncertainties.
Our data comes from Bitcoinity and includes the daily market capitalization of Bitcoin since July 2010. Market capitalization, or market cap, is calculated as the total U.S. 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 viz.
Bitcoin Market Cap by Year
2010: $1.4 Million
2011: $33 Million
2012: $143 Million
2013: $9.4 Billion
2014: $4.3 Billion
2015: $6.4 Billion
2016: $15.3 Billion
2017: $213.9 Billion
2018: $66.9 Billion
2019: $130 Billion
2020: $160.7 Billion (as of 03/05/2020)
While the origins of Bitcoin go back to 2008, with its invention by the still-unknown Satoshi Nakamoto, it began to take real commercial value by the middle of 2010, when our data starts. While its price slowly climbed over the next two years, 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 two-year 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 $1,000 in January 2017, the price escalated to a record-high price of $19,783.21 per bitcoin on December 17, 2017. Just days later, however, the market experienced a 30% drop. Exactly one year later, on December 17, 2018, Bitcoin was $3,250: an 84% decrease from its peak. While Bitcoin has not yet pierced $20,000, its price increased 87% in 2019, closing the year at just over $7,100.
So, what does 2020 have in store for the cryptocurrency? Like many assets, Bitcoin has been awash in volatility among coronavirus fears. The price of bitcoin recently lost 10 percent of its value in under 24 hours, as much of the market also went into free-fall. While some claim that Bitcoin can act as a safe haven in times of geopolitical unrest (such as a pandemic), it’s unclear that the coronavirus has boosted interest in the digital currency. From this episode, it appears that as the market falls, so does Bitcoin.
However, Bitcoin defenders remain confident about the asset’s 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 virus.”
While Bitcoin’s 2020 performance to date may be adversely affected by the coronavirus, some Bitcoin-lovers expect things to end on a very high note: entrepreneurs John McAfee and James Altucher have repeatedly claimed the price of bitcoin will hit $1 million by the end of 2020.
Are you a Bitcoin or cryptocurrency owner? Why or why not? Do you think the spread of coronavirus will affect Bitcoin’s market capitalization? Let us know in the comments and share with your friends.
About the article
Published: 11 March 2020
