Bitcoin, BTC

Bitcoin is a cryptographic payment system operating on a blockchain and a distributed network of nodes. The cryptocurrency project with a White paper was presented on 21 October 2008, by a developer under the pseudonym Satoshi Nakamoto. On 3 January 2019, it was he who mined the first 50 BTC in a genesis block, and on 12 January performed the first transaction by sending 10 BTC to Hal Finney.

Currently, a team of developers called Bitcoin Core develops and updates the protocol. Miners and full nodes maintain the system operation. Independent bitcoin developers use the Bitcoin source code and the language of smart contracts Script for their personal advantage.

The unit of account in the Bitcoin system has the same name but is spelt in lowercase — bitcoin. One coin is divided into 100 million parts called a satoshi. The cryptocurrency issue is limited to 21 million coins. 87% of them have already been mined and circulate in the market, or can be tracked on bitcoin addresses of earlier enthusiasts and marquee investors. The exact number of available coins is indicated above the bitcoin chart.

Bitcoin dominance in the crypto market

Bitcoin is the leader that sets the general attitude of the market and influences prices of 5 thousand altcoins and tokens. It could be seen by comparing its dynamics with other cryptocurrencies, especially during a meteoric increase and a sharp fall of the bitcoin price. One more option is to take a look at the dominance index, which has not gone lower than 60% since July 2019.

More than anybody, Bitcoin attracts traders and investors because it has high liquidity and capitalization: a daily trading volume is $34 billion, and capitalization is $131 billion (recent data is indicated above the bitcoin chart). Such indicators do not expose the main cryptocurrency to exchange manipulations and risk of a 51% attack (which is a controlling stake).

Experts think that the main reasons for this dominance are the trust of the crypto community, increasing interest to the blockchain technology, and also an emotional factor. Some say that the BTC price slightly correlates to a hashrate (network complexity).

Ups and downs

A serious interest in cryptocurrencies is relatively recent, so most users do not understand the market laws. They are too easily affected by all, even insignificant, events and news. The crowd’s behaviour affects prices, making them and the whole market too volatile. Thus, bitcoin went through dozens of significant ups and downs. However, the most notable was its maximum in December 2017, when the BTC price reached 20 thousand US dollars. Here is a clear timeline of ups and downs:

• 2009: in autumn, bitcoin received an exchange rate to US dollar for the first time — 1300 BTC for 1 USD.
• 2010: the first several-fold price increase was in July — from 0.008 to 0.08 USD; the second one was in November — from 0.06 to 0.50 USD.
• 2011: first, BTC established parity with USD and then set new records. In June, the price reached a maximum of 31 USD and crashed.
• 2012: during the first half of the year, the price was volatile in the range of 5–8 USD. The price started a slow increase in August and reached 13 USD in December.
• 2013: BTC broke the previous record; in April it was traded for more than 100 USD and reached the mark of 230 USD. Then it crashed again, and it took a long time for BTC to recover. Its price went back to 200 USD only in October. In November, the price became four-digit for the first time and set the new record in December with 1150 USD.
• 2014: a downtrend started, the price went down to 400 USD. In June, it went up to ‘the number of the beast’ (666) but could not hold it and went down again to 300 USD.
• 2015: up to autumn, the price ranged from 250 to 300 USD. An increase emerged only in November, and the year’s maximum was a tick at 475 USD.
• 2016: a confident increase started in May — from 500 to 760 USD. Then a slight correction followed, and after that came an obvious uptrend with the BTC price reaching 960 USD.
• 2017: the price passed the 1000 USD mark in February and the 2000 USD mark in May. In August, it crossed the 3000 USD threshold, and the trend morphed into a frenzy. During the ‘crypto boom,’ BTC grew by leaps and bounds. For the first time, the price became five-digit and reached an all-time high of 20,080 USD at the end of the year.
• 2018: in January, there was a collapse in prices, which was followed by a severe ‘crypto winter.’ Late investors counted losses, pessimists buried BTC, and critics were happy about that this bubble had popped. Failing to stick to the threshold at 10,000, the price dropped to 6500 USD. BTC was in such a flat till November and then started testing the bottom. It was found at the mark of 3200 USD spotted in December.

The current state and bitcoin price prediction

From the beginning of 2019 and till April, the market was experiencing stagnation. Only bitcoin optimists had any trust left in the price recovery up to 20 thousand, or at least up to 10 thousand dollars. The rest did not even hope for a miracle and settled on a thought that 4000 would be the price limit then. Analysts split down the middle on the issue with opposite predictions for bitcoin:

1. Some thought that there could be a craze in late 2019, which will be more epic than the crypto boom of 2017.
2. Others predicted further downfall, thinking that the top dollar for bitcoin was 3000.

Nevertheless, the miracle happened: in April, the price exceeded 5000, and in May it passed the marks of 6000 and 8000 dollars. It continued to grow steadily to a peak of 13,700 dollars in late June. In July, there was a correction to 9900, then a reversal to 13,000 dollars; one more correction — up to 9500, and again a return — to 12,000 dollars.

Fundamental analysis experts explained the unexpected growth like this: in 2018, cryptocurrency prices collapsed because governments with regulators slightly strangled local crypto markets to calm the uncontrolled excitement. Then, in the spring of 2019, Facebook began to promote the Libra currency, which distracted regulators from Bitcoin. They fixated on the new global currency, began to plan the development of their stablecoin analogues, and Bitcoin was no longer perceived as a danger.

Anyway, the flat lasted for a whole month at a level of 10,000, which ended in a fall to 8000 dollars at the end of September. At this reduced level, the price remained in a flat for another month. Then there was a drawdown all the way to 7500 and a rebound up to 9700 dollars during the day. After that, there was a month of a downtrend to the mark of 6630. Until the end of the year, the flat again lasted at the level of 7000, with the only drawdown to the mark of 6600.

Bitcoin perspectives for 2020

In early 2020, the bitcoin exchange rate to the dollar finally went up: in January it rose from 7000 to 9500, in mid-February it even set the maximum for this year — 10,450 dollars. Then it was corrected and again went sideways. And then came the global financial crisis. More precisely, it appeared earlier in other markets, it just got to the crypto market on 10 March.

Now traders and investors are waiting for a halving to occur in the network: a halving of the reward to miners for generating a block. According to the bitcoin prediction, this event, scheduled for May, should restore prices in the cryptocurrency market.