How much does a Bitcoin COST or is WORTH - What is its REAL VALUE

Bitcoin value today

Precio Bitcoin Bitcoin

57.898,70 $ ▲1,63%

Data obtained from cryptocompare.com.

How much is a bitcoin worth? Even if you are not very familiar, you have surely seen news about the value of bitcoin and its increase in recent years. If you had spent 1€ on bitcoin when it was created, in 2017 you could have sold them for nearly 15 million euros. But why is bitcoin worth so much?

In this article, we will help you understand everything around the bitcoin price How is its value determined? Is it backed by someone?

Who backs bitcoin

Bitcoin is a payment platform created in 2009 by Satoshi Nakamoto. This financial system uses a digital currency which has been the reason for its great popularity: the bitcoin cryptocurrency.

Learn more about bitcoin in the article about what is bitcoin.

One of the main characteristics on which bitcoin is based is decentralization. That is, it is not issued by any government, organization or company and furthermore, it is not considered as legal tender in any country.

This does not mean it is illegal, but rather that it is not considered as fiat money. In fact, many companies are starting to back some cryptocurrencies and several governments are developing regulations to apply taxes on bitcoin.

The Bitcoin Money

It is necessary to break it down. The Bitcoin, capitalized, is the payment platform, which is based on blockchain technology and has caused a real revolution in the industry.

On the other hand, bitcoin, lowercase, is what they call cryptocurrency. It is a digital currency that serves as a reward to the miners who maintain the payment platform. But it can also be exchanged in certain financial markets, giving value to bitcoin.

If nobody supports it and it is not a legal currency...

How is the price of bitcoin determined?

How much does a bitcoin cost

The value of bitcoin is determined solely by one factor: the market. That is, the law of supply and demand.

Bitcoins can be bought and sold on platforms known as Bitcoin exchanges that determine how much it costs to buy a bitcoin.

In these platforms, cryptocurrency owners propose a selling price for their bitcoins, while buyers suggest another price to acquire the digital currency. When both prices intersect, the order is executed and the bitcoin transaction is completed.

This happens thousands of times per second on hundreds of different platforms. The intersection of all these orders establishes the value of bitcoin.

When there are many users who want to buy and there is little supply, sellers can offer a higher price for their bitcoins and their value tends to increase. The opposite happens when there are few people who want to buy, when sellers have to lower the price of their cryptocurrencies to get rid of them and the value of bitcoin tends to decrease.

When supply and demand are more or less balanced, the price tends to remain constant.

So...

How Bitcoin price is determined

It is determined by market laws and the trust of its users.

When positive news arise, such as the commercialization of ETFs or cryptocurrency futures, its price tends to increase.

On the other hand, when the news is negative, such as rumors of prohibition by some government or the well-known million-dollar thefts of cryptocurrencies, the value of bitcoin tends to plummet.

Furthermore, when a government develops regulations related to cryptocurrencies, its price tends to react negatively, due to a hypothetical tax pressure on them. However, in the long run, it is very positive news, as it indicates acceptance by different countries.

Additionally, Bitcoin has a characteristic that directly influences its price: It has a limited supply. The maximum number of bitcoins in circulation will be 21 million. By 2032, 99% of the bitcoins will have been issued, but as the mining rate is decreasing over time, it is estimated that the last bitcoin will be issued in 2140.

Being a deflationary currency, experts relate the behavior of bitcoin to that of gold, expecting a future occurrence of what they have called a Bitcoin standard.

The Bitcoin pattern

Although gold mines are constantly being exploited, new discoveries are periodically made, which has resulted in gold reserves remaining relatively constant throughout history. This has translated into its price, which also behaves uniformly, earning it the label of a safe haven asset.

This stability in price allows for the value of other goods, such as the monetary unit, to be related to the value of gold. This is called the gold standard.

Since the number of bitcoins will also be stable, these experts claim that a Bitcoin pattern will exist.

However, a lot of time must pass before this is achieved. Bitcoin must be accepted by governments, regulated, and its use must be highly widespread. No one can predict the price at which Bitcoin will settle when all of this happens.

Initial value of bitcoin

Bitcoin was born in January 2009 and until early 2010 there was no market or any exchange platform.

Bitcoin was usually exchanged in forums as a hobby and even given away in many cases. There was even a user known as SmokeTooMuch who tried to sell 10,000 BTC for $50, but found no buyers. Therefore, most sources claim that the initial bitcoin price was zero.

How did bitcoin start?

The initial value of bitcoin was zero.

Other sources indicate that the few transactions that took place at that time gave a value to bitcoin of $0.000764.

In April 2010, the first exchange, BitcoinMarket.com, now disappeared, was created. The first transactions were made at a price of $0.003.

Historical maximum price of bitcoin

In 2017, bitcoin experienced a true bullish rally and it was in that year when the price of bitcoin reached its historical maximum.

On December 17th, the price of bitcoin reached the historical maximum to date, reaching $19,798. This milestone was achieved after several US organizations, such as CBOE and CME, began trading bitcoin futures.

Although the official historical maximum value of bitcoin is $19,798, some exchanges, such as Korean ones, traded BTC above $21,000.

Historical value of bitcoin

Date Price Comments
January 2009 - March 2010 Practically nothing (€0) Bitcoin had just been created and there were no exchanges. Users exchanged their cryptocurrencies for entertainment through forums. Some sources claim that the first transactions assigned a price of $0.000764 to bitcoin.
April 2010 $0.003 BitcoinMarket.com, the first exchange in history, is born, now defunct.
May 2010 Less than $0.01 On May 22, 2010, the first bitcoin transaction for a good took place. Laszlo Hayneck bought two pizzas for 10,000 BTC in Jacksonville, Florida.
July 2010 $0.08 ▲▲ In just five days, the price of bitcoin increased by 1,000%, rising from $0.008 to $0.08.
February 2011 - April 2011 $1.00 ▲▲ In two years, bitcoin achieves parity with the dollar.
July 2011 $31.00 ▲▲ In July 2011, there was first talk of a bitcoin bubble. On July 8th, it reached a peak of $31.00 and then experienced the first sharp drop in its value.
December 2011 $2.00 ▼▼ After months of decline, bitcoin hit bottom at $2.
December 2012 $13 For a whole year, bitcoin enters a slightly upward trend.
April 2013 $266 ▲▲ In 2013, the price of bitcoin enters a bullish race in which it increases by 5% to 10% daily. On April 11th, it reaches an all-time high of $266.
May - October 2013 $100-$150 After the peak, it stays in a sideways trend between $100 and $150, with a minimum of $70 in June 2013. May $130, June $70-$110, October $150.
November 2013 $350 - $1250 ▲▲ In November 2013, the price of bitcoin starts the month at $150 and quickly rises to $200. Then it starts hitting new all-time highs: $400, then $600, $900, and breaks $1000 on November 27th, 2013.
December 2013 $600 - $1000 After a series of drops and rebounds, the price enters a sideways movement between $650 and $800.
January 2014 - October 2015 $300 - $750 For a year and a half, the price remains more stable within a bearish trend. It experiences sharp drops due to events like the closure of MT. Gox (February 2014) or a false report of the ban of bitcoin in China (March 2014). The lows are reached in April 2014 ($340) and March 2015 ($200 - $300).
November 2015 $395 - $504 The 2015 peak is reached in November, at $504.
2016 $450 - $750 In 2016, the price of bitcoin remains in a sideways trend. It reaches highs around $700-$750 in June and November. The latter is associated with the depreciation of the Chinese yuan against the US dollar.
January - February 2017 $800 - $1,200 2017 represents a true rally for bitcoin. Although it experiences ups and downs in January (depreciating 30% to $750 in the week of 5-12), bitcoin enters an upward trend in the early months of the year.
March 2017 +$1,290 Bitcoin ETF is traded at the US SEC, causing records like surpassing gold in value or the highest number of users in history. The historic maximum price of bitcoin to date of $1,242 is surpassed, and it trades above $1,290.
April 2017 $1,210 - $1,250 = Sideways trend. It remains at $1,200.
May 2017 +$2,000 The value of bitcoin starts the month at $1,400. On May 20, 2017, another all-time high is reached, surpassing $2,000.
June 2017 +$3,200 On June 12, bitcoin surpasses the $3,000 barrier for the first time, surpassing $3,200.
August 2017 $4,400 On August 12, 2017, the $4,000 resistance is surpassed, and on August 14, 2017, a new peak is reached, reaching $4,400.
September 1, 2017 $5,000 The price of bitcoin surpasses the $5,000 barrier.
September 12, 2017 $2,900 ▼▼ The value of bitcoin plummets due to China's restriction on ICOs, Bitcoin, and financial crackdown on cryptocurrencies.
October 2017 $5,600 - $6,180 ▲▲ The market realizes the absence of Chinese repression. In October, bitcoin recovers and reaches new all-time highs, first $5,600 on October 13th, then $6,180 on October 21st.
November 2017 $7,600-8,100 In November 2017, the price of bitcoin exceeds the $7,000 resistance for the first time and soars to reach $8,004.59 on the 21st. It is speculated that this may have been triggered by the coup in Zimbabwe, where a local Bitcoin exchange may have traded above $13,500.
December 2017 $17,470 - $19,900 ▲▲ In December 2017, bitcoin, and the cryptocurrency market in general, undergo an unprecedented bullish rally. The broad acceptance and influx of funds into the market cause bitcoin's price to increase by over 100%. On December 11th, $17,470 is surpassed, coinciding with the launch of futures contracts by CBOE. On December 17th, the all-time high price of bitcoin to date is reached at $19,798, corresponding to the CME's introduction of futures trading. South Korean exchanges traded BTC above $21,000.
January - February 2018 $6,375 - $11,785 ▼▼ After the bullish run of 2017, bitcoin enters a bearish trend in 2018. The price corrects strongly, reaching a minimum of $6,375 on February 2nd, and then recovers to $11,785 on February 20th.
March - April 2018 $6,700 - $9,400 March continues the bearish trend. It starts April at $6,700 but closes the month near $9,400.
May - June 2018 $9,900 - $5,995 Although it reaches $9,900 at the beginning of May, it loses the support of $6,000 and drops to $5,995.
July - August 2018 $6,341 - $8,315 = During July and August, bitcoin remains above the $6,300 support, although with significant fluctuations, with price peaks above $8,000. This period is marked by the refusal of the US SEC to approve bitcoin ETFs.
September - October 2018 $6,400 - $6,700 = The price enters a more stable sideways trend between $6,400 and $6,700.
November 2018 $5,600 - $3,850 ▼▼ In November 2017, the price of bitcoin experiences several collapses due to anonymous mass BTC sales. On November 14th, more than 80,000 BTC are sold, causing the price to drop to $5,600. On the 19th, another 60,000 BTC are sold, breaking the $5,000 support to $4,900. The minimum of $4,388 is reached on November 20th, and between the 24th and 26th, it touched $3,850.
December 2018 - January 2019 $3,300 Between December 14th and 16th, a new minimum below $3,300 is reached, and then it enters a sideways trend between $3,800 and $3,900 that continues into January 2019.

You can learn more about the history of the cryptocurrency in the article about the evolution of bitcoin.

Real value of bitcoin

No one can predict the real value of bitcoin, as it depends on user acceptance and market confidence in cryptocurrencies.

Therefore, the price of bitcoin depends directly on the creation of new financial markets related to cryptocurrencies, the development of regulations by governments, the evolution of security in bitcoin exchanges, and ultimately, all factors that help cryptocurrencies gain widespread acceptance in society.

Found it interesting? Learn much more about cryptocurrencies in our bitcoin guide.