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The price increase of bitcoin over time | Firi

Lasse Schultz21/02/2022

Of all the asset classes, it is bitcoin that has seen one of the strongest price increases in recent times. In the period 2009 - 2021, the price of a single bitcoin has increased from NOK 0 to a high of NOK 611,730. A common misconception is that bitcoin is a volatile asset to own. It depends on the time period you look at, but taken as a whole, bitcoin’s price has risen in 11 of the 13 years it has been around for.

The early days

Bitcoin was invented by Satoshi Nakamoto in 2008, with the first version launching in 2009 when the first block in the blockchain was generated. Bitcoin came on the market in 2009 for a price of NOK 0, with its price reaching NOK 0.80 in the summer of 2010.

The first bull run in bitcoin’s history began a few months later with an extended period of strong price growth. Its price then rose from NOK 0.53 in October 2010 to a new high of NOK 282 in June 2011. This was an astronomical increase, equivalent to 52,048% in eight months.

After this sharp increase came the first bear market in bitcoin’s history, or an extended period of sharp declines in price. The price fell a full 93.75%, from NOK 282 to NOK 17 over the next five months.

Over the next 25 months, from November 2011 to December 2013, bitcoin once again saw strong increases in its price which rose 62,086%, reaching a new high of NOK 10,980 for a single bitcoin in late 2013. At the time, this increase in the price of bitcoin was largely driven by demand on the illegal market. These markets included Silk Road, a digital marketplace that operated on “the dark web” and provided criminals with a way of selling illegal items. This also allowed customers to buy illegal items and since they didn’t want to identify themselves using a credit card, bitcoin was what many people used for transactions.

Recently, however, it has turned out that bitcoin is more than just a currency for criminals, and that this period has given bitcoin and other cryptocurrencies an undeserved bad reputation.

The first big bitcoin mania

After the explosive price increase at the end of 2013, bitcoin entered its second bear market. In August 2015, its price reached a low of NOK 1,430, marking the end of almost two years of bear marketand a price drop of 87% from its high of NOK 10,980.

From this low of NOK 1,430, bitcoin started one of the most talked about bull runs in history. In February 2017, just 18 months later, bitcoin again broke its previous high of NOK 10,980 and things were only set to continue. Slowly but surely, bitcoin became a talking point during the spring of 2017 by which time it had already gained a large base of followers among developers, technology enthusiasts and others.

Events between then and the end of 2017 made sure everyone would hear about bitcoin. After breaking NOK 12,400 at the start of May 2017, bitcoin experienced exponential increase, peaking at NOK 175,300 in December 2017. By now, Bitcoin was everywhere. All the newspapers and all the news channels were writing and talking about bitcoin, the decentralized digital currency which was now disrupting the traditional financial system for the first time.

The crash in 2018

All good things must come to an end and the same goes for bitcoin’s price.

After increasing more than 12,000% from August 2015 to December 2017, it was inevitable that bitcoin would see another bear market. The price of bitcoin fell slowly but surely throughout 2018 as did the attention bitcoin garnered in the media.

During this period, many people lost faith that bitcoin would ever return to the price it achieved in December 2017. A lot of people wrote bitcoin off, comparing it to the tulip crash in the 17th century, among other things. 363 days after its peak of NOK 175,300, its slump ended on December 15 at NOK 27,650 and with that bitcoin had survived its third bear market with a price drop of over 80%.

The COVID crash

After the low of NOK 27,650 in late December 2018, the entire crypto market saw a long-awaited period in the black. Over the next 6 months, the price of bitcoin rose to NOK 122,800 and with that most people were sure that they would never see prices below NOK 50,000 ever again.

From June 2019 to February 2020, the price hovered between NOK 60,000 and NOK 100,000, but then something happened that no-one had anticipated. The coronavirus pandemic put the world on lockdown, and the stock market crashed. The price of bitcoin followed suit.

At 02:00 on March 12, 2020, one bitcoin costs NOK 70,000. The news of lockdowns all over the world spread like wildfire, striking a huge amount of fear into the market. On the same day, 9 hours later, at 11:00, the price had fallen 22.5% to NOK 55,000.

The next few hours were relatively calm and the price remained steady at around this price, before falling again towards the evening. From midnight to 02:00 on March 13, the bitcoin price fell another 33%, from NOK 50,000 to a low of NOK 34,000. These 24 hours are still among the worst in the history of bitcoin, with its price falling 52%, leading to billions in losses in what is known as leverage trading.

After the rain comes the sun

If you can keep your head while all others around you are losing theirs, you will often find the best way out of a situation, and the same was true during the COVID crash. While many people panic-sold their bitcoins, it was the ones who bought who emerged as winners on this day.

NOK 34,000 proved to be the lowest point and the price of bitcoin hasn’t looked back since. March 13, 2020 was the start of the bull run we currently find ourselves in. On April 29, 2020, just over a month after the crash, the price was back to NOK 70,000 and with that bitcoin had recovered everything it had lost since March 13.

In August 2020, the price of bitcoin was NOK 110,000 kroner and there was renewed optimism on the market. Toward the end of October 2020, bitcoin saw another exponential increase that took its price from NOK 110,000 and past the previous high of NOK 175,300 set in 2017. On December 16, bitcoin made history by breaking NOK 175,300. On April 14, 2021, a new high was set at NOK 574,600 and with that the price had increased over 1,500% in just 14 months.

Once again, bitcoin was on everyone’s lips and this time there were major players involved too. Today, large companies, banks and pension funds own bitcoin and you’d be hard pushed to find someone who hasn’t heard of cryptocurrency and bitcoin.

As is always the case when prices increase too quickly, the price of bitcoin fell between May 10 and May 19, 2021 from NOK 527,000 to NOK 262,000. Over the next two months, the price hovered between NOK 260,000 and NOK 350,000 before new life was breathed into the crypto market towards the end of the summer. From July 21 to November 10, 2021, the price of bitcoin increased from NOK 260,000 to NOK 611,730, it highest price to date.