Bitcoin hits $100K: From pizzas to a Bitcoin national stockpile

As I sit here, reminiscing about the incredible journey of cryptocurrencies over the years, I can’t help but feel like I’ve lived through several lifetimes. It all started with buying pizzas for a few cents, and now we’re talking about millions!

Over a period of over 15 years, Bitcoin has surpassed the $100,000 mark – a significant achievement as it represents the world’s first decentralized digital currency, which had a value so minimal at one point that it was even distributed for nothing.

Today, I’m handling a financial instrument that is being managed by some of the globe’s most esteemed financial entities. Its worth places it in the same league as several nations among the top ten by Gross Domestic Product.

Let’s examine the journey that Bitcoin (BTC) has taken, starting from virtually zero value and ending up at its current level.

The Bitcoin Faucet — BTC for nothing

Bitcoin, invented by the anonymous figure known as Satoshi Nakamoto, was initially released on January 3rd, 2009, with Nakamoto themselves mining the very first block. Just three days later, on January 12th, Nakamoto made the first transaction in the blockchain’s history by sending 10 Bitcoins to software developer Hal Finney.

Back then, Bitcoin held little value and the means to acquire it were limited; essentially, anyone with a computer could engage in mining, a process that yielded Bitcoins.

As a researcher, I had the privilege of being among the early miners in the crypto sphere, specifically with Bitcoin. In the vibrant month of June 2010, I, Gavin Andresen, pioneered an innovative platform known as “The Bitcoin Faucet.” This unique site offered a reward of 5 Bitcoins to each visitor, a bounty that refreshed daily. The only requirement was the simple completion of a CAPTCHA puzzle.

Initially, Andresen deposited approximately 1,100 Bitcoins onto his website; however, subsequent reloads and contributions from others caused the site to distribute a total of 19,700 Bitcoins. If each Bitcoin was worth $100,000 at that time, the total value would have been approximately $1.97 billion.

Two large Supreme pizzas? That’ll be $1 billion, please

In that very year, Bitcoin was mostly exchanged among cypherpunk enthusiasts for amusement, and they set its worth through discussions on the Bitcoin Talk forum. However, a significant event took place on May 22, 2010 – a transaction by programmer Laszlo Hanyecz that marked the first instance of commercial use of Bitcoin in history.

In a post on Bitcoin Talk, Hanyecz proposed exchanging 10,000 Bitcoins, valued around $40 then, for two big pizzas.

As a researcher, I accepted the offer from Papa John’s and placed an order for two top-tier pizzas, priced approximately $25 each, from their establishment in the UK.

10,000 Bitcoins currently have a value of approximately one billion dollars, and the day when Hanyecz made his famous order is recognized and honored among cryptocurrency enthusiasts as Bitcoin Pizza Day.

Had Hanyecz kept his initial 10,000 Bitcoins, they would be worth enough to purchase approximately 65% of Papa John’s business, currently valued at $1.54 billion.

US dollar parity, Nakamoto vanishes

On February 9, 2011, Bitcoin achieved equality with the U.S. dollar for the very first time, as it was traded at $1 on Mount Gox, a pioneering but now-closed cryptocurrency trading platform.

A few months later, in April 2011, Nakamoto sent their last verified communication.

$100 to $1,000: Bitcoin’s massive 2013

In 2012, I found myself primarily observing Bitcoin in two key areas: the underground online marketplace Silk Road and the cryptocurrency exchange Mt. Gox. This year also marked its debut on mainstream television, with an episode of the legal drama “The Good Wife” titled “Bitcoin for Dummies.” This was believed to be the first instance of Bitcoin being mentioned on prime-time TV.

🔄Back in the year 2012, Bitcoin made its debut on the television series The Good Wife. At that time, Bitcoin’s value was a mere $3. 💸

— CryptoMoon (@CryptoMoon) October 19, 2024

2013 marked a significant shift in my perspective regarding Bitcoin. In January, I found it trading around the $13 mark. However, come April, it had already reached an impressive $100. From there, its value gradually increased throughout the year. But it was in November that things really took off – soaring 450% and surpassing the $1,000 milestone. On Nov. 30, 2013, it peaked at over $1,100. This rapid growth caught my attention and sparked a renewed interest in understanding this digital currency.

In my analysis, a 2018 research paper posits that the dramatic price surge towards the end of 2013 in the cryptocurrency market might have been orchestrated by an individual employing automated programs (bots) and questionable transactions on Mt. Gox to artificially inflate trading volume, creating the illusion of a larger market than what truly existed.

By this point, Bitcoin was gaining significant attention from a broader audience. On October 1, 2013, Ross Ulbricht, the founder of Silk Road, was apprehended by the FBI, who also confiscated a large quantity of Bitcoins in the process.

In the same month, specifically on October 29th, the very first Bitcoin Automated Teller Machine became operational inside a downtown Vancouver coffee shop.

Initially taking action against cryptocurrencies as early as 2013, China eventually enforced a complete ban on crypto transactions in 2021. During this initial phase, the Chinese government forbade financial institutions from engaging in Bitcoin trades or offering services to cryptocurrency businesses.

$1,000 to $10,000 — the 2017 ICO boom

For a considerable time, the value of Bitcoin remained above $1,000. However, after 2013, it experienced a slowdown period. This lull was triggered when Mt. Gox, responsible for approximately 70% of all Bitcoin transactions, ceased operations in early 2014. It was later discovered that this shutdown was due to an extensive hack that had been overlooked for years.

In January 2017, Bitcoin surpassed the $1,000 mark once more, driven by renewed enthusiasm for cryptocurrency thanks to numerous initial coin offerings (ICOs) on Ethereum.

In November 2017, Bitcoin surpassed $10,000 and came close to hitting $20,000 by December. However, after the ICO crash, Bitcoin’s value dropped significantly, reaching a low of approximately $3,200 in December 2018.

In July 2017, a yellow pad bearing the words “Purchase Bitcoin” was displayed behind Janet Yellen, who was then the Chair of the Federal Reserve, during a live congressional hearing. This pad was later auctioned off for 16 Bitcoins in April 2024, which equated to more than $1 million at that time.

Back in January 2018, the initial scaling solution for blockchain, known as the Lightning Network, became operational. This development allowed for swifter transactions within the Bitcoin system.

For quite some time, Bitcoin failed to surpass its previous high of approximately $20,000, but when it eventually did, it achieved this milestone with great flair.

$60,000 — the COVID boom

As a researcher, I found myself navigating through an unprecedented time in 2020 marked by economic stagnation on a broader scale due to the forced closure of businesses and the mandate for individuals to stay home during the early phase of the COVID-19 pandemic. Interestingly, amidst this gloom, Bitcoin showed resilience, experiencing a remarkable surge. Starting from a low of $5,000 in March, it climbed steadily and reached nearly $20,000 by December, quadrupling its value within this timeframe.

However, weary due to consecutive lockdowns and having received additional funds through government aid, retail traders found themselves attracted to cryptocurrencies and popularly known “meme” stocks in the year 2021.

In just over a month from December 1 to New Year’s Day 2021, Bitcoin surged dramatically, rising from around $20,000 to almost $30,000. It reached $40,000 only a few days after that on January 9, followed by $50,000 by mid-February, and it broke the $60,000 mark in March.

In simplified terms, the market was too hot which caused Bitcoin’s value to fall nearly in half to around $30,000 by late July. However, it quickly rebounded and reached an all-time high of $67,617 by early November 2021. This peak price remained until 2024.

$70,000 — the ETFs

Following Bitcoin’s peak in 2021, there was a somewhat challenging phase as global regulators intensified their scrutiny over cryptocurrencies during the years 2022 and 2023, particularly after the failure of Terra blockchain. This downward trend reached its lowest point at $15,700, a significant drop occurring only a year after its record high in November 2021.

2023, January 21st marked the moment when the initial Ordinal inscription was etched onto the blockchain, introducing NFT-style assets for Bitcoin. This paved the way for the emergence of fungible BRC-20 tokens around March, a few months later.

As an analyst looking back at the events of late 2023, I find it noteworthy that Bitcoin had managed to bounce back to approximately $40,000. This resurgence can be attributed to a revived interest in the cryptocurrency, spurred by the filing of Bitcoin exchange-traded funds (ETFs) by 11 prominent US financial firms. Remarkably, these applications were approved for trading, marking their debut on January 11.

In about three months, the value of Bitcoin finally matched its rise, achieving this when it soared past $70,000 in mid-March and reached an all-time high of $73,000.

$90,000 and beyond — the Trump pump

In the time following Bitcoin’s peak in March, it traded within a limited range from approximately $55,000 to $65,000 for several months, with this trend persisting until after the United States presidential election on November 3rd (when Donald Trump was declared the winner).

During his campaign, Trump advocated for cryptocurrencies, promising legal certainty and an end to perceived regulatory obstacles within the U.S. His victory sparked renewed enthusiasm in the crypto market as investors anticipated a more favorable environment for digital currencies.

In the days following the election and up until November 13, Bitcoin prices rose from approximately $68,000 to above $90,000. A week later, on December 5, it reached and surpassed $100,000.

Despite surpassing six figures, certain analysts believe that Bitcoin may still have potential for further growth, with some predictions suggesting it could potentially double to reach $200,000 by 2025. This bullish sentiment is fueled in part by Donald Trump’s pledge to amass a substantial government hoard of Bitcoin.

A number of supporters of Bitcoin anticipate that its value could reach $1 million within a few years, leaving it with approximately a 900% increase left to achieve – a feat that this digital currency has demonstrated the capacity to accomplish on multiple occasions in the past.

As an analyst, I find myself reflecting on the remarkable journey of Bitcoin, the pioneer in the cryptocurrency realm. From its humble beginnings of purchasing pizzas, it has evolved into a financial asset that policymakers worldwide, particularly in America, view as a potential solution to a debt crisis. It’s evident that Bitcoin is here to stay for quite some time, continuing its trailblazing path within the global financial landscape.

2024-12-07 17:15