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It’s been a bumpy year for bitcoin hodlers, but despite the rough ride, over the last 12 months, the price of the cryptocurrency has risen by more than 95% since this time last year.
On New Year’s Eve 2018, the price of bitcoin was sat at around $3,700, at the time of writing in 2019 however, the price has surged to around $7,300. That’s a 97.3% increase. Compared to other types of asset over the same time period, bitcoin has performed exceptionally. The Dow Jones Industrial Average rose 27.37%, and the UK FTSE 100 rose by a modest 14%. Not bad. But it’s been a test of nerves for investors this year.
As we entered 2019, bitcoin’s price continued to trickle downwards, hitting a low of $3,400 on February 8, according to data from CoinMarketCap. But from that point, the price began to climb, with monthly gains leading all the way to July 12, where the price of bitcoin hit its 2019 high of $12,955. Since then the market has been dominated by dramatic price swings.
The first came shortly after its July high. In just five days, the price slumped from nearly $13,000 back down to $9,481 by July 17. But by August 6, the price was way up again, sitting at $12,240.
September, October, and November all saw similar patterns with billions wiped off the price of bitcoin before an almost miraculous recovery. While those recoveries never quite saw the price of bitcoin return to its July peak, if you’d bought bitcoin in January you’d still be sitting pretty.
Making sense of it all
There has been a myriad of reasons why this year has had so many swings. A report by Chainalysis suggested a Chinese ponzi scam was behind the mid-December crash. Others suggested investors are just tired of all the swings and got out while the going was (moderately) good.
“Many companies and individuals that hold Bitcoin or other crypto still need to liquidate to fund their day to day expenses, and the fear of Bitcoin crashing even further is likely causing people to sell off further,” said Simon Yu, CEO of StormX, an e-commerce platform for micro-tasking, told Decrypt.
We’ve actually compiled a learn guide on why bitcoin’s price is so volatile. The TL:DR of it is, this is what happens in a small market (when compared to other assets like gold and equities) where there are a few big players or whales that cause significant shifts in price whenever they move their crypto. You can read the whole thing or watch our video.
But despite the turbulent waters of 2019, exchange chiefs seem optimistic about bitcoin’s fortunes in 2020.
Executives at top South Korean crypto exchanges Bithumb, Korbit, and Hanbitco believe that market conditions will be brighter in 2020 thanks to improved regulation and a shift in the appetites of institutional investors.
Japanese exchange executives seem to agree that 2020 will be a golden year, too. There’s also the long-awaited halvening of Bitcoin mining rewards to come in May as well. In the last two such events, bitcoin’s price trended upwards-albeit not always right away. Many are hoping this could lead to further gains for investors in the crypto asset.
If you’d been lucky enough to get into bitcoin in 2010 however, 2019’s highs and lows mean diddly squat compared to what happens if you held bitcoin for a decade.
Most profitable investments of the decade:
Domino's Pizza: +3,000%
— Decrypt (@decryptmedia) December 26, 2019
Happy New Year hodlers.