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Cryptocurrencies created substantial wealth for investors who bought these virtual coins anytime before the beginning of 2017. Some of the most popular cryptocurrencies, like Litecoin, Bitcoin, Ethereum, Stellar, and Ripple, generated astonishing returns for anyone who bought, mined, or otherwise acquired these digital currencies soon after they came into existence.

Just eleven years ago Bitcoin started trading at $0.00099. Now it’s trading in the $34k range after hitting an all-time high of $64k. What it means that bitcoins worth $100 in 2009 are now $3.43 billion US dollars. In 2009 $100 could have bought 101,010 bitcoins. The current market cap of bitcoin is $645 B. The total circulating supply of bitcoin is 18,743,737 BTC.

One of the big questions on people’s minds right now is: Where the price of bitcoin is headed in the future? Is there any chance it will go above its recent all-time high of $64k? Some are saying it will crash to $20k or even lower, others are forecasting the bitcoin to skyrocket above $200k and hit $500k to $600k. So, in order to make the right investment/trading decisions, I decided to dig deeper into this territory.  It’s hard to predict Bicton’s price given that it’s such a volatile asset, but by looking at the historical prices and fundamentals we can have a better idea about the future price of Bitcoin.

I hope you are going to find this article useful.

What is Bitcoin?

Bitcoin is a digital currency or cryptocurrency created in January 2009. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. Unlike fiat currency, Bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain.

Bitcoin was an unknown asset until 2017 but ever since has gained huge popularity. Retail investors, as well as institutional investors, are more inclined to buying bitcoin and other cryptocurrencies.

When I first started looking at bitcoin in early 2016, I was not convinced to buy even a single bitcoin at $400 as I thought my money isn’t going to be safe and I’ll not be able to have full control over it. However, in the past few years the more research I did on this asset class the more convinced I am to allocate a portion of my portfolio in cryptocurrencies and stocks of companies involved in the crypto business.

When Bitcoin was first introduced to the market people thought that it is going to be used in everyday transactions like US dollars or other currencies. After researching this sector, I have learned that the majority of people don’t see bitcoins as a mode of transaction, but rather as a safe haven investment like gold. Millennials treat bitcoin as digital gold the same way the baby boomers are attached to physical gold.

Bitcoin is the new gold, it captures about 6% of the eleven trillion dollars market cap of gold which is around. Currently, most people are only able to afford to buy satoshis rather than whole Bitcoins for their portfolios. The good news is that as the earliest virtual currency to meet widespread popularity and success, bitcoin has inspired the creation of many other cryptocurrencies in its wake. Nowadays there are many alternatives to bitcoin that can potentially generate higher returns.

Bitcoin’s Historical Price Movements

Bitcoin’s history as a store of value has been turbulent.  Bitcoin has gone through several cycles of boom and bust over its relatively short lifespan of eleven years.

Bitcoin at the time of writing this article was trading in the $34000 range.  It’s actually consolidating after reaching an all-time high of $64k. The majority of people who are new to Bitcoin would think that it’s very expensive and unaffordable. In order to have an idea of the future price targets for Bitcoin let’s go into the details of all the historic price movements since its inception in 2009:

Worth of 1 Bitcoin in 2009

In the very early days of Bitcoin, there were no exchanges that look anything like the offerings today. But there was at least one exchange established in the first year since Bitcoin’s inception.

The BitcoinTalk forum went online in late 2009 and soon enough one regular proposed the idea of an exchange where people could buy and sell Bitcoins for fiat currency. Keep in mind that this was when the block reward was 50 BTC and there were very few people mining.

The BitcoinTalk forum member NewLibertyStandard set up New Liberty Standard Exchange, and another forum user – Sirius – sent him 5050 BTC in exchange for $5.02 through PayPal. This puts the first recorded price at which Bitcoin exchanged hands at $0.00099/BTC. So, Bitcoin since its inception in 2009 has gained  3,434,343,434%.

Worth of 1 Bitcoin in 2010

Bitcoin’s price never topped $1 in 2010! Its highest price during the second year was just $0.39!

2010 is the year in which the famous purchase of two Dominos pizzas for 10,000 BTC took place.

BitcoinTalk forum member laszlo offered the following trade:

2010 also saw the opening of the infamous Bitcoin exchange Mt. Gox in July.

Worth of 1 Bitcoin in 2011

Bitcoin’s adoption started to pick up steam in 2011. The Electronic Frontier Foundation (EFF) accepted Bitcoins as donations for a couple of months in 2011. However, due to lack of legal precedent surrounding virtual currencies, this arrangement was quickly rescinded, though this was later reversed in 2013 when the EFF began accepting Bitcoin again.

On February 9th, 2011, BTC reached a value of USD$1.00 for the first time ever. A few months later, in June, the price of one Bitcoin hit $10, then $30 on Mt. Gox. This represented a 10000% gain since the beginning of the year when the price of Bitcoin hovered around $0.30.

By the end of the year, Bitcoin was trading around $5, but at least two important psychological barriers had been broken.

Worth of 1 Bitcoin in 2012

Bitcoin stayed relatively flat in 2012, it started trading around $5.00 and stayed there for the first half of the year.

Bitcoin then reached its yearly peak at the end of December, hitting a high of $13.45.

In November 2012, Bitcoin underwent its first-ever halving. This dropped the block reward from 50 BTC to 25 BTC.

WordPress became the first major company to begin accepting Bitcoin for payment in 2012. The online content management system provider did this in response to PayPal’s censorship.

Though WordPress’s move was a big one for the four-year-old cryptocurrency, the company wasn’t handling Bitcoin transactions itself. Rather, it used BitPay, which was founded in 2011 and by October 2012 had grown to processing Bitcoin payments for more than 1,000 merchants.

Worth of 1 Bitcoin During 2013-2016

2013 saw the first major spike in the price of Bitcoin since 2011. From $13.00 at the beginning of the year, Bitcoin punched through $100 easily and hit nearly $290 on April 10, 2013. The daily candle chart of bitcoin price in US dollars below shows that bitcoin revisited the $1 range briefly three times in 2013 but the lowest close of $62.9 was reached in July 2013. From $1 in 2011 to $290 on April 10, 2013, Bitcoin saw a gain of 29000% in about two years.

It then cooled off for a while, before experiencing another rapid appreciation to $1175 in December of that year, a gain of about 9000% since the beginning of the year. 

Bitcoin’s record-breaking run pushed the cryptocurrency’s market capitalization over $1 billion for the first time ever. It also attracted a lot of attention. In February of 2013, Coinbase reported selling more than $1 million worth of Bitcoin at an average price of $22.

The world’s first Bitcoin ATM was installed in Vancouver, allowing people to turn their cash into crypto.

During the next bear market, Bitcoin went from its highest price of $1175 to the lowest price of $100. In fact, the $1oo mark was reached in a day on Feb 10, 2014, where the price crashed from $703 dollars to $100. But the overall loss that day was only 1% as the bitcoin settled back to $687. As a part of my research, I was curious to know what happened on Feb 10, 2014. So according to Wikipedia:

On February 10, 2014, the BTC-e bitcoin exchange rate dropped by over $500, crashing from $620 to $102 in seconds, and then rebounding within two minutes. The crash is the result of what appears to be a single person selling at least 6,000 bitcoins significantly below the market price. The motives of the sale are a subject of debate. As the sale was made with apparently extreme loss, it has been suggested that it was an attempt to manipulate trading bots.

If we ignore the manipulative glitch down to $100 in 2014, bitcoin lost about 85% and $1,000 proved to be a tougher psychological resistance level. Despite reaching prices that early Bitcoin holders had only ever dreamed about, it took more than three years for the price to reach $1,000 again. The price of Bitcoin was relatively flat for years.

Worth of 1 Bitcoin During 2017-2018

2017 is a year that lives in crypto history. As you can see in the chart above, In 2017, Bitcoin once again broke the $1,000 resistance on January 1st for the first time in three years, and after the 28th of March, it never revisited that level. The year saw a steady appreciation in the price of Bitcoin followed by a huge blow-off top to nearly $20,000.

This 1,300% increase in price wasn’t the largest yearly growth but it was the first time that Bitcoin truly broke into the mainstream of public opinion.

The massive appreciation in price over the course of 2017 was driven in part by strong retail interest in cryptocurrency. A $19,000 Bitcoin was impossible to ignore. Trading volume on Bitso – Mexico’s leading exchange – grew 1,500% in the six months ending March 2017. Poloniex experienced a 600% growth in the number of active traders on its platform throughout the year.

2018 was a tough year for many in Bitcoin, both seasoned investors and those new to space who had been attracted by the hype of 2017. Bitcoin’s year-on-year (YoY) return for 2018 was a painful -73%.

Google, Twitter, and Facebook all passed bans on Bitcoin and cryptocurrency advertisements on their platforms, with the latter claiming that they were “frequently associated with misleading or deceptive promotional practices.”

Bitcoin closed 2018 at $3,830 – more than $10,000 down from where it ended the previous year.

The good news for investors (though they wouldn’t know it just yet) was that the bottom of Bitcoin’s bear market had come on December 15, when the price hit $3,215.

Worth of 1 Bitcoin in 2019

2019 was a rollercoaster ride for Bitcoin hodlers. Technically for bitcoin, the 200-day moving average at $3,000s was the bounce point from early 2019 as shown in the chart above. The price of Bitcoin rose nearly $10,000 to hit $13,880 by mid-2019. Bitcoin then traded sideways between the $6000 and $9000 range for six months. In 2019, bitcoin gained about 81%.

The bounce from $3,500 to $13,800 in 2019 proved that Bitcoin was not dead, despite the naysayers of the 2018 bear market.

2019 set the stage for what would prove to be one of the most extreme years in Bitcoin’s history: 2020.

and finally started moving higher after touching a low of $4000 during March 2020 market crash.

Worth of 1 Bitcoin in 2020

Bitcoin rose strongly from $7,000 at the beginning of 2020 to more than $10,000 in mid-February.

$10,000 proved to be a critical level for Bitcoin throughout the year, though it would take until October for the price to leave the $10,000s once and for all.

First came the March 2020 market crash. Triggered by the Covid-19 pandemic, a global liquidity event, and exchange liquidation engines run amok, Bitcoin sold off nearly 40% on March 12. It hit a low of $4,000 before doubling in price over the next six weeks.

Bitcoin then entered a months-long accumulation pattern, before charging above $10,000 in late July. It hit a high of over $12,000 before dumping back to below $10,000 in early September.

This proved to be the final fakeout, though. From September to the end of the year, the price of Bitcoin rallied 185% to close at just under $29,000. This was more than $10,000 above the previous all-time high set in 2017.

From the agonizing March crash to the parabolic move into the end of the year, 2020 was a year of extreme highs and lows for Bitcoin.

This was driven in part by institutional investors. MicroStrategy’s purchase of more than $1 billion worth of Bitcoin at an average price of $15,964 over the course of 2020 made headlines. So did the Massachusetts Mutual Life Insurance Company, spending more than $100 million on Bitcoin. This was a watershed moment for the cryptocurrency, as insurance companies are known to be conservative in their investments.

2020 proved that Bitcoin can bounce back strongly from major global events. In fact, it may even be stronger as a result. Many investors are looking to Bitcoin as a safe store of value in the face of unprecedented money printing in many countries.

Bitcoin Price in 2021 and Beyond

What an incredible year 2021 has been so far for Bitcoin! Bitcoin exploded 230% higher by reaching an all-time high of $64829 in April 2021.

Bitcoin, since December 2018,  gained about 1900% again over a period of twenty-seven months and still after more than 50% retracement is about %900 higher.

Bitcoin at the time of writing this article was trading in the $34000 range.  A healthy bull market requires corrections so Bitcoin is now in a short bear market. The question is how long this correction will last and what will be the lowest price of this correction.

Bitcoin Price Based on Stock-to-Flow Model

The Stock-to-flow model for Bitcoin was developed by Plan B. 

This model treats Bitcoin as being comparable to commodities such as gold, silver, or platinum. These are known as ‘store of value’ commodities because they retain value over long time frames due to their relative scarcity. It is difficult to significantly increase their supply i.e. the process of searching for gold and then mining it is expensive and takes time. Bitcoin is similar because it is also scarce. In fact, it is the first-ever scarce digital object to exist. There are a limited number of coins in existence and it will take a lot of electricity and computing effort to mine the 3 million outstanding coins still to be mined, therefore the supply rate is consistently low.

As can be seen in the stock-to-flow chart that Bitcoin price has continued to follow the stock-to-flow of Bitcoin over time. A divergence chart in the lower section of the chart shows the model variance between price and stock-to-flow. When price moves above stock-to-flow, the divergence line turns from green to red indicating an opportunity to take profits.

Our Target for Bitcoin

We could assume that based on the previous corrections in 2015 and 2019 if Bitcoin is going to lose 80%-84% of its value, it could reach the lowest price in the $11000 range. However, the 20k range for the correction seems more reasonable because it is strong support. Also, the 200-day seems to be moving to the $20k range by the end of the year, and bitcoin has a history of bouncing off 200-day MA as can be seen in the bitcoin weekly chart above.

Some analysts are suggesting that bitcoin will trade between the $30k to $40k range for few months before a final push down to a lower price.

Regardless of how long the price correction lasts, the real parabolic cycle will start after this short bear market is over and bitcoin will ultimately break its all-time high of $64k.

Financial experts and bitcoin bulls are anticipating that bitcoin may reach as high as $600k in the coming years but I think it could easily hit the $200k target sometime in 2022. From a technical perspective, 19 times the lowest projected price of $11k is $209K. 

Why Bitcoin Will Trade Above $200k?

Even though bitcoin value has received appreciation from $0.00099/BTC to $30,000/BTC since its inception, the market capitalization of Bitcoin is much lower compared to other asset classes. The mainstream stocks are very overvalued and may start a correction anytime.

The main driver of bitcoin price has been retail investors but lately, there has been a major shift of wealth from retail investors to institutional investors. Economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. In fact, institutional investors have already started buying bitcoins and other cryptocurrencies.

Cathie Wood and her team at Ark Invest had been modeling for more companies to use bitcoin as an alternative to cash on the balance sheet.

We have been expecting institutions to start moving into Bitcoin and other crypto assets, but primarily bitcoin, Cathie Wood

According to Ark’s Big Ideas for 2021, if all S&P 500 companies were to allocate 1% of their cash to bitcoin, its price could increase by approximately $40,000. If those companies moved 10% of their cash to bitcoin, Ark sees the cryptocurrency climbing by $400,000. Institutional allocations between 2.5% and 6.5% could have a substantial impact on Bitcoin’s price by $200,000 to $500,000.

Ali Mizani (Founder of FiCAS AG, Swiss) has predicted the bitcoin price since 2016 when the price was around $900. He thought BTC will reach $18k to $20k by the end of 2020 and he was right again. And good news, it is not going to be the end of the line. He thinks the BTC price can and will reach $200k to $300k by the end of December 2021 to March 2022. 

Conclusion

In 2009 the first recorded price at which Bitcoin exchanged hands was $0.00099/BTC

In 2010, the highest price of bitcoin was $0.39, a 39,393% gain since its inception. 

On February 9th, 2011, BTC reached a value of USD$1.00 for the first time ever and reached a peak of $30. This represented a 10000% gain since the beginning of the year when the price of Bitcoin hovered around $0.30.

Bitcoin crossed the $100 & $1000 marks in 2013 but could not stay above $1000. Bitcoin value increased by 6000% in 2013

In 2019, bitcoin gained about 81%

In 2020, bitcoin gained about 300%

Bitcoin, since December 2018,  gained about 1900% by reaching an all-time high of $64829 in April 2021.

It’s clear by looking at the historical price appreciation of bitcoin that in the early years when no one knew about bitcoin the percentage gain was huge, 10,101,010% since inception when bitcoin touched $100. If someone invested $100 in bitcoin in 2009, their net worth would have reached $10 M.

At the current price, if you invest $100 in bitcoin the profit can be from $700 to a maximum of $2000. I would put some of my money into bitcoin but would keep most of the money in five to ten other cryptocurrencies that will possibly get higher appreciation.

The key to investing smartly is when the asset is undervalued. The cryptocurrency market is still in its early phase so we need to closely observe and hunt for reputable cryptocurrencies.