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From novice pilots asking questions about what cryptocurrency is to the mavericks keeping their eyes on the ever fluctuating current bitcoin price, there is a consensus that seems to bring them together: why is bitcoin prices the massive giant that it is in the crypto world and is there a way for effective bitcoin price prediction

Cryptocurrency, the Wıld West of money making measures, may be encroaching on its twilight years as governments begin to recognize the legitimacy behind it and attempt to reign in tokens by chaining it with regulation and oversight. 

Bitcoin Price History

Just as recently as December of 2021, the United States had the Chairman of the FED (federal reserve) state that, “stablecoins can certainly be a useful… part of the financial system if they are properly regulated” which resulted in financial experts, weighing in on the FED’s statement, that “the federal reserve is toying with the idea of issuing a digital currency”. This became that much more realistic in January of this year when the FED moved from toying to active contemplation. 

In January, the federal reserve board released a paper that discussed the “the pros and cons of a potential U.S. central bank digital currency, or CBDC”. The FED doesn’t seem to want to sit idly in the shadows anymore; it is hungry, and seems poised to take a bite of cryptocurrency for its meal.

Questions have popped up from novices and veterans alike that have culminated into a lot of uncertainties; had the FED been involved, what would the effect have been upon the coin (if any)? 

Would cryptocurrency itself have struggled? Would there have been a deeper dive from cryptocurrency users into the even wilder market of altcoins? 

These questions began to give rise to further misinformed considerations such as wondering if the FED had earlier interactivity with Bitcoin, would it have counteracted bitcoin price inflation; a consideration that is absolutely incorrect. Bitcoin inflation is already programmed into its software so the federal reserve would have no impact on it, nor any ability at regulating it; a good thing considering the FED’s history in hyper inflation of fiat—rendering Bitcoin as a better store of value.

What is certain, is that bitcoin, over the years, has become a powerhouse going through years of massive gains and some massive corrections; but there is an argument to be made that Bitcoin has shown that the giant is here to stay.

What is Bitcoin?

Before we go any further, it is important to understand just what, exactly, is Bitcoin? Bitcoin is a decentralized cryptocurrency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. 

It is part of a blockchain in which computers solve massively complex mathematical formulas in competition with each other until they reach a consensus cryptographically across the various nodes. It has a public accounting of records for any transactions of bitcoin purchases and exchanges.

Beyond this, bitcoin is actually a representation of what is known as a “satoshi”; but what is a satoshi? A satoshi is the smallest denomination of bitcoin, named after its founder, and represents one hundred millionths of a bitcoin (that is a lot of satoshi). 

Think of it like this, as the bitcoin price began to be reflected in much higher values, people’s purchasing of bitcoin began to purchase fractions upon fractions rather than the whole token. Due to this, a denomination to reflect these fractional transactions was necessary to represent the purchases. A satoshi represents this denomination which makes bitcoin transactions easier and more readable.

Bitcoin price major events 

So, to answer the original questions of why is bitcoin price the massive giant that it is and is there a way to be effective in bitcoin price prediction: it is complicated. Throughout the years, bitcoin’s price has had fluctuations due to various environmental considerations, varying levels of interest and awareness, and attacks in differing modalities (from hacking to disregarding it from notable figures in the financial industry). 

Some of the notable events throughout its early life had the DEA seize bitcoin as a unit of asset in a drug raid, linking bitcoin erroneously to a nefarious enterprise which the public took note (2013). Also in 2013, The People’s Bank of China prohibited Chinese financial institutions from using bitcoins and in 2014, one of the largest bitcoin exchanges suspended withdrawals citing technical issues and then filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen. 

Months before the filing, users experienced difficulties withdrawing funds which gave the impression that Bitcoin could not only be hacked, but sink businesses and leave people trading bitcoin dry.

From its early years, Bitcoin was seen as some passing idea that was not going to stick around; a fad, a mistake, or as Warren Buffet once said, a “mirage”. However, there were some major changes to these early tunes that transformed Bitcoin from a one hit wonder to a superstar. 

Nations began to seriously consider how it can be implemented within various structures, legitimate enterprises began to form out of it and, suddenly, large investors began to take note. In 2017, Japan passed a law that allowed bitcoin as a legal payment method. In the same year, Russia legalized the use of cryptocurrency and, notably, bitcoin. More users began to flock into purchasing bitcoin with the Mexican exchange Bitso see volume trading increase to 1500%. 

Though, as the United States drags its feet, the jewel of the desert, Las Vegas, announced with the reveal of their newest casino in 2021, that they would accept bitcoin as legitimate payment. 

2017 bitcoin price

While there were years in which bitcoin existed prior to this year, bitcoin’s price skyrocketed in 2017. The price of bitcoin in 2017 ranged between $1,100 to $20,000— about a 20x rise within the span of 12 months. What accounted for this huge increase was, in part, due to two things: a general increase in awareness of bitcoin’s value and after the halving. 

On December 18, the coin broke its all-time high reaching approximately $20,000 but in just five days, on December 22, bitcoin suffered a 45% drop and fell below $11,000 before rallying out the end of the year at around $14,000. Regardless, bitcoin was still very much strong at the close of the year.

2018 bitcoin prices

Following the close of the 2017 year, the beginning of January 2018 saw another large increase with the coin rising to about $16,000 on January 8th until just four days later with rumors spreading that South Korea may ban trading cryptocurrency, the price of bitcoin dropped — and it would not be the last. 

Near the end of January, Coincheck, Japan’s largest cryptocurrency OTC market, was hacked which resulted in Coincheck indefinitely suspending trading. In March, compromised Binance API keys were used to execute irregular trades which was then followed with a ban from various social media on advertisements for initial coin offerings. Within the 2018 year, bitcoin plummeted to finish the year at approximately $4,000; a drastic change from the previous.

2019 bitcoin prices

Due to the crash of 2018, 2019 served as the continued effect from this crash with some considering it a  dark year for cryptocurrency while others saw it as a ray of hope. At the start of 2019, bitcoin languished for the month of January until it began to rise slowly; inspiring more people to reinvest in the coin. 

However, as the price seemed to be increasing and people began to see 2019 as the recovery from their very own Great Depression, bitcoin sputtered and crashed once more from its high of about $13,000 back down to finish the year off at around $7,000. 

While it is important to note the crash that bitcoin experienced, this was the second time that, year over year, bitcoin finished the year at a higher low than its previous. People began to wonder whether bitcoin, and cryptocurrency itself, was going to see the kinds of numbers that had excited people back in 2017 again. Would bitcoin break its ceiling? 

2020 bitcoin prices

At the beginning of 2020, there was a hushed silence in the cryptocurrency world as everyone watched bitcoin; and they had good reason to. At the beginning of 2020, bitcoin’s price steadily inched upward from approximately $7,000 to $10,000 before suffering another setback in March dipping back down to approximately $5,000. 

This was just the rumbling before bitcoin let loose and by the middle of April, bitcoin left Earth behind and has never returned to orbit. From the lows of $5,000, bitcoin roared to life to close 2020 at approximately $29,000. However, this was not the end.

2021 bitcoin prices

In 2021, bitcoin entered its golden year, seemingly unable to contain itself as the price of bitcoin over the course of 7 days in early January went from approximately $29,000 to approximately $42,000; a spiked increase of 69%. At its lowest point, bitcoin briefly touched near where 2020 had closed at, and just as quickly as it kissed its surface, bitcoin roared again and soared upwards to approximately $68,000. 

While bitcoin price did drop a bit all the way until the end of the year, it did close at a healthy approximate value of $48,000. Once again, demonstrating that each year of bitcoin’s rises and falls, the end of the year’s close for bitcoin was always higher than its last.

Current Bitcoin Prices

Currently, bitcoin’s price sits at an approximate value of $42,000. While this number may be a considerable overall drop from its highest price in 2021, it is still important to note that bitcoin over the years has had steady growth and recovery. 

This is not to say that bitcoin cannot drop further, nor does it mean that it cannot rise past 2021’s all time high; what it does demonstrate is the relative strength of survival regarding bitcoin, cryptocurrency, and by extension, other various tokens that look to bitcoin as the big signifier on whether the market will continue business as normal or whether it is teetering. 

So, for those novice pilots nervously awaiting their own takeoff to the mavericks wondering how much fuel is left, take note that, over the years, bitcoin has continued. The bitcoin price has fluctuated, but its core has always remained. Keep those sights on bitcoin price live trained well as there is no telling what 2022 might entail.

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