From worthless to a $2 trillion market value: The 16-year evolution of Bitcoin

Source: Talking about Li and Beyond

If we were to choose the best-performing asset of the past decade, there is no doubt that Bitcoin would rank first. Data shows that in the past 11 years, Bitcoin has been the best-performing asset class for 8 of those years, as shown in the figure below.

So, how did Bitcoin grow from being worthless to a market value of over $2 trillion? On the occasion of Bitcoin's 16th anniversary, let's take a moment to review the evolution of Bitcoin over the past 16 years:

(1) In 2009, Bitcoin's value was $0

On January 3, 2009 (2:15 AM Beijing time on January 4, 2009), Satoshi Nakamoto created the first block, known as the genesis block of Bitcoin, on a small server located in Helsinki, Finland, and received the first reward of 50 bitcoins generated by the system. Thus, the first Bitcoin was born. As shown in the figure below.

At the same time, Nakamoto embedded a message:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

Nakamoto's deliberate reference to the above headline from The Times seems to reflect his commentary on the economic challenges of the time and the potential demand for an alternative financial system.

(2) In 2010, Bitcoin's highest value was $0.5

On May 22, 2010, Bitcoin received its first market value recognition when a Bitcoin enthusiast named Laszlo Hanyecz used 10,000 bitcoins to purchase two pizzas. As shown in the figure below.

At that time, the market value of these two pizzas was $30, which means that the price of 1 BTC was equivalent to $0.003. This very commemorative experimental attempt was also the first time BTC was artificially priced in the real world, and people later celebrated May 22 as "Bitcoin Pizza Day."

As summer approached in 2010, Bitcoin began to generate small-scale communication/trading activities within a niche circle of technical experts and financial enthusiasts, with the BitcoinTalk forum being the main discussion and communication platform for these individuals.

In July 2010, Mt. Gox (which we will mention later) was established, and from this point on, Bitcoin finally had its own "trading price." By October of the same year, the price of Bitcoin had risen to $0.1, and in November, it peaked at $0.5, before dropping back to $0.3, which remained stable until the end of the year.

In January 2010, Bitcoin's price was $0, in December 2011, it was $0.3, and the highest price that year was $0.5.

(3) In 2011, Bitcoin's highest value was $31.9

In January 2011, Bitcoin's trading price first broke $1, and was subsequently featured in an article by Forbes magazine, marking an important milestone. Bitcoin's price was catalyzed to rise directly to $8.89 by the end of May 2011.

On June 1 of the same year, the Gawker website (an American internet gossip site that has since closed in 2016) published an article stating that Bitcoin was very popular on the Silk Road website, further driving Bitcoin's price up to $27, with the total market value of all circulating bitcoins reaching $130 million.

Note: The Silk Road website may be sensitive; a detailed introduction can be found through Google. This site operated from 2011 to 2013, allowing users to anonymously buy and sell various services or goods using Bitcoin, as shown in the figure below. At that time, this indeed brought Bitcoin to a wider audience, but it was also a controversial site. In October 2013, the FBI arrested the site's operator and shut down its operations, seizing a large amount of Bitcoin.

In January 2011, Bitcoin's opening price was $0.3, in December 2011, the closing price was $4.7, and the highest price that year was $31.9.

(4) In 2012, Bitcoin's highest value was $15.4

In June 2012, Coinbase was officially established, and at that time, there were only a few exchanges providing Bitcoin trading, such as Mt. Gox and Bitstamp. On November 28 of the same year, Bitcoin underwent its first halving, reducing the block reward from 50 BTC to 25 BTC, which laid the foundation for Bitcoin's scarcity-driven value.

In January 2012, Bitcoin's opening price was $4.7, in December 2012, the closing price was $13.5, and the highest price that year was $15.4.

(5) In 2013, Bitcoin's highest value was $1156.14

On November 30, 2013, Bitcoin first broke $1000, reaching $1156.14, marking the first major bull market for Bitcoin. That year, Mt. Gox quickly rose to become the largest exchange at the time, with nearly 7 out of every 10 Bitcoin transactions being completed on Mt. Gox.

In January 2013, Bitcoin's opening price was $13.5, in December 2013, the closing price was $754.01, and the highest price that year was $1156.14.

(6) In 2014, Bitcoin's highest value was $1017.12

One of the significant events that year was the collapse of Mt. Gox. In February 2014, Mt. Gox announced bankruptcy due to a hacker attack that resulted in the theft of 850,000 bitcoins. This event had a massive impact on Bitcoin, leading to a continuous price decline and widespread concern about the security of cryptocurrencies. It also sparked protests from some Bitcoin holders at the time, as shown in the figure below.

In the same year, innovations such as multi-signature wallets began to become mainstream. At the beginning of 2014, only 0.02% of bitcoins were secured using this technology, but by the end of the year, this number had increased to 5%, with the daily transaction volume of bitcoins using multi-signature increasing by 79 times.

Also, in March of that year, the People's Bank of China issued a notice titled "Notice on Further Strengthening the Risk Prevention Work of Bitcoin," requiring banks and third-party payment institutions to close accounts of domestic Bitcoin trading platforms. As shown in the figure below.

In January 2014, Bitcoin's opening price was $754.97, in December 2014, the closing price was $320.19, and the highest price that year was $1017.12.

(7) In 2015, Bitcoin's highest value was $495.56

This year marked the first true bear market for Bitcoin, but the price of Bitcoin continued to rise, indicating that it was beginning to attract more attention from people. Some individuals and institutions were preparing for the next wave of cryptocurrency. As shown in the figure below.

In January 2015, Bitcoin's opening price was $320.43, in December 2015, the closing price was $430.57, and the highest price that year was $495.56.

(8) In 2016, Bitcoin's highest value was $979.40

On July 9, 2016, Bitcoin underwent its second halving, reducing the block reward from 25 BTC to 12.5 BTC. On April 28 of the same year, the famous gaming platform Steam announced that it would accept Bitcoin payments.

That year, Bitcoin even made it to CCTV, with Huobi's Li Lin being interviewed on camera, as shown in the figure below.

Additionally, in that year, as the community focused on SegWit and the Lightning Network, the debate over Bitcoin's scalability began to heat up, laying the groundwork for Bitcoin's future development.

In January 2016, Bitcoin's opening price was $430.72, in December 2016, the closing price was $963.74, and the highest price that year was $979.40.

(9) In 2017, Bitcoin's highest value was $20089

This year marked the second bull market for Bitcoin since its inception, and it was also the largest cryptocurrency bull market experienced at that time. Bitcoin's price successfully broke through $20,000, with an annual increase of 1984.66%. It was during this bull market that Da Long officially entered the space and got involved with Bitcoin, recalling that the first purchase was just a trial of 2000 RMB worth of Bitcoin.

At the same time, many significant events occurred this year, such as:

On August 1, 2017, SegWit was successfully activated, leading to the emergence of Bitcoin's first fork coin (Bitcoin Cash).

On September 4, 2017, the People's Bank of China and seven other ministries jointly issued a notice titled "Notice on Preventing Risks of Token Issuance and Financing," declaring ICOs illegal financial activities and suspending all related trading in the country. This day later became known as the "94" incident in the cryptocurrency community.

On September 14, 2017, six ministries issued another joint statement announcing the shutdown of all domestic cryptocurrency exchanges and prohibiting them from providing exchange channels between RMB and cryptocurrencies. Subsequently, exchanges began to go overseas and ushered in a new era of cryptocurrency trading and OTC trading.

On December 11, 2017, CBOE (Chicago Board Options Exchange) launched Bitcoin futures trading under the code XBT, marking the first Bitcoin futures listed globally.

On December 17, 2017, Bitcoin broke the historical high at that time, reaching $20089.

This bull market, driven by Bitcoin's explosive growth and the ICO wealth creation movement, led to many stories of sudden wealth, and Bitcoin began to attract global attention.

Additionally, that year saw significant changes in the rankings of exchanges. Besides Huobi and OKCoin, which originated from the 2013 bull market, exchanges represented by Binance were also established, leading to a blooming era of exchanges.

In January 2017, Bitcoin's opening price was $963.66, in December 2017, the closing price was $14156.40, and the highest price that year was $20089.

(10) In 2018, Bitcoin's highest value was $17712.40

With the collapse of the ICO craze, the first round of speculative frenzy came to an end. As thousands of altcoins saw their prices drop or go to zero, the cryptocurrency market entered a new bear market cycle, which many referred to as the "winter of cryptocurrencies." However, even so, Bitcoin's price remained relatively stable overall. As shown in the figure below.

In January 2018, Bitcoin's opening price was $14112.20, in December 2018, the closing price was $3742.70, and the highest price that year was $17712.40.

From the time Satoshi Nakamoto published the Bitcoin white paper in 2008 until this year, Bitcoin has completed a decade. Although it has gone through many ups and downs, the world seems unable to stop Bitcoin any longer.

(11) In 2019, Bitcoin's highest value was $13796.49

With the launch of the Lightning Network on the Bitcoin mainnet in March 2018, the Lightning Network began to gain attention in 2019, enabling faster and cheaper Bitcoin payments. However, the market for Bitcoin this year was quite frustrating, with prices fluctuating due to significant events impacting the industry, seemingly attempting to transition between bull and bear markets.

2019 was also referred to by many as the year of DeFi, with various DeFi products and business models emerging like mushrooms after rain, including MakerDao, Compound, dYdX, and others.

Additionally, several significant events occurred this year, such as:

In January 2019, Binance kicked off a new fundraising frenzy, a model known as IEO (Initial Exchange Offerings), marking the beginning of a new fundraising model in the cryptocurrency space. As shown in the figure below.

In June 2019, the Plus Token wallet (a Chinese project) was exposed for running away with funds, leading to the collapse of the first CX funding scheme in the cryptocurrency space. You can find relevant stories about Plus Token by searching on Google.

In November 2019, Canaan Creative (established in 2013 and the world's second-largest Bitcoin mining machine manufacturer) went public on NASDAQ, marking the first step for cryptocurrencies to enter traditional capital markets, also known as the first blockchain stock.

In January 2019, Bitcoin's opening price was $3746.71, in December 2019, the closing price was $7193.60, and the highest price that year was $13796.49.

(12) In 2020, Bitcoin's highest value was $29244.88

Entering 2020, the uncertainty brought by the COVID-19 pandemic to the global economy marked another important moment for the cryptocurrency market. Bitcoin began to shine like digital gold, increasingly seen as "digital gold." As the Federal Reserve printed trillions of dollars to combat the pandemic, many investors turned their attention to Bitcoin, making it a new financial force capable of countering inflation.

It was also from this year that MicroStrategy began purchasing Bitcoin, sparking a global wave of corporate adoption of Bitcoin. This year became a long-awaited year for institutional funds to flow into Bitcoin.

Moreover, the DeFi boom (DeFi Summer) also began this year, initially represented by Maker, and later, with Compound launching its governance token COMP in June, the landscape of DeFi changed, sparking a wave of "yield farming." In September of the same year, Uniswap also conducted a large-scale airdrop.

Additionally, an event worth mentioning is OKEx (now OKX). In October 2020, it was revealed that OKEx founder Xu Mingxing had been taken away by domestic police for investigation, leading to the suspension of user withdrawals on the OKEx platform. This news caused a widespread decline in mainstream cryptocurrencies, with BTC briefly falling below $11,200. (I initially used OKEx frequently, but after this incident, I didn't use this exchange for a long time. However, with Xu Mingxing's subsequent overseas move and the upgrade of the OKX brand, along with OK's seizing of the wallet layout opportunity in 2023, the user base of OK has also grown significantly.)

In January 2020, Bitcoin's opening price was $7194.89, in December 2020, the closing price was $29001.72, and the highest price that year was $29244.88.

(13) In 2021, Bitcoin's highest value was $68789.63

2021 was also the third major bull market for Bitcoin, with Bitcoin reaching (close to) $69,000, setting a new historical high.

At the same time, many significant events occurred this year, such as:

Elon Musk was very active during this bull market. On January 29, 2021, Musk changed his Twitter bio to "#bitcoin," causing Bitcoin's price to rise by 18% that day, reaching $38,000. It was also under Musk's influence that DOGE achieved an increase of over 16,000.00% and became a viral sensation. I remember that even those who had never paid attention to the cryptocurrency market began discussing DOGE in their social circles.

On February 8, 2021, Tesla announced it had purchased $1.5 billion worth of Bitcoin and stated it would consider accepting Bitcoin as payment for its products (cars). On the day this news broke, Bitcoin's price peaked at $56563.72.

On April 13, 2021, Coinbase went public on the NASDAQ, becoming the first publicly traded cryptocurrency company in the U.S.

Starting in May 2021, China launched a multi-dimensional crackdown on cryptocurrencies, including:

On May 18, the three associations issued a notice titled "Notice on Preventing Risks of Virtual Currency Trading and Speculation," leading to the famous "519" crash, where Bitcoin's price plummeted by 40% in one day, hitting a low of $30,000.

On May 21, the Financial Stability Development Committee of the State Council held its 51st meeting, emphasizing the need to crack down on Bitcoin mining and trading activities to prevent individual risks from spreading to the social sphere.

On May 26, the Inner Mongolia Development and Reform Commission released eight measures to resolutely crack down on virtual currency "mining" activities.

On June 9, the Changji Development and Reform Commission in Xinjiang issued a notice to immediately suspend and rectify enterprises engaged in virtual currency mining.

On June 9, the Qinghai Provincial Department of Industry and Information Technology issued a notice to carry out cleanup and rectification of virtual currency "mining" projects.

On June 18, the Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Administration issued a notice to clean up and shut down virtual currency "mining" projects.

On June 21, the People's Bank of China issued a notice, summoning several banks and payment institutions, including Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China, Industrial Bank, and Alipay, and subsequently, major banks and Alipay responded by stating they would "resolutely not engage in or participate in any business activities related to virtual currencies."

On June 9, 2021, the South American country of El Salvador passed a bill making Bitcoin legal tender in the country. El Salvador became the first country in the world to grant Bitcoin legal status.

On November 10, 2021, Bitcoin's price reached a historical high of $68790.

In January 2021, Bitcoin's opening price was $28994.01, in December 2021, the closing price was $46306.45, and the highest price that year was $68789.63.

(14) In 2022, Bitcoin's highest value was $48086.84

This year, Bitcoin's price continued to decline, and the cryptocurrency market once again entered a bear market. The collapses of Luna/UST and FTX significantly undermined people's confidence, creating a sense of a prolonged bear market. However, it was also in this year that I decided to publicly do something, ultimately choosing the path of self-media and founding the self-media IP "Talking about Li and Beyond."

Several events left a deep impression on me this year:

Many people around me left the space, and various communities began to feel lifeless. I also chose to withdraw and block all messages from groups, spending most of my time quietly writing and publishing articles.

On February 24, 2022, the Russia-Ukraine war broke out.

From May 7 to May 13, 2022, the leading algorithmic stablecoin UST experienced two decouplings, ultimately falling into a death spiral, leading to the collapse of both LUNA and UST.

On July 14, 2022, the well-known crypto lending platform Celsius faced insolvency and ultimately filed for bankruptcy protection.

On July 2, 2022, Three Arrows Capital filed for bankruptcy protection.

On November 9, 2022, FTX entered a full-blown collapse and filed for bankruptcy on November 11. At that time, I was also using this exchange, but I had withdrawn most of my assets beforehand, so I did not incur significant losses.

Overall, 2022 could be considered one of the most tumultuous years in the history of the cryptocurrency market. However, opportunities often arise from despair, and it was from May 2022 that we began a new round of Bitcoin "20-month" dollar-cost averaging plan, which we have reviewed and organized in detail in the previous article (January 1).

In January 2022, Bitcoin's opening price was $46311.74, in December 2022, the closing price was $16547.50, and the highest price that year was $48086.84.

(15) In 2023, Bitcoin's highest value was $44705.52

For the cryptocurrency market, this year was quite challenging, but for "Talking about Li and Beyond," 2023 was also a year of rapid growth. The articles began to transition from being unnoticed to gathering a community of like-minded partners. This year, we also launched the first e-book of "Talking about Li and Beyond," titled "Advancing Blockchain Thinking."

Although the market still experienced a bear market this year, Bitcoin's fundamentals remained strong. Many people (including myself) were looking forward to the bull market opportunities in 2024-2025, and many were also excited about the potential approval of ETFs.

Several significant events also occurred in 2023, such as:

In January, the Bitcoin Ordinals protocol emerged, and shortly after, the BRC-20 concept became one of the most important new narratives of the year.

In February, with the launch of the Blur token, the NFT market experienced a resurgence, allowing many to gain considerable profits from Blur's airdrop.

In March, many received airdrops from ARB, and inscriptions gained some attention. However, most people's focus seemed to be on the banking crisis in the U.S., as American banks faced severe runs, leading to plummeting stock prices and even the collapse of some banks (such as Silvergate Bank, Silicon Valley Bank, and Signature Bank).

April seemed to belong to Hong Kong, as the Global Blockchain Conference was held there, and Hong Kong announced several favorable policies for cryptocurrencies. Additionally, a significant event was the Ethereum upgrade (Shanghai upgrade and Capella upgrade).

In May, a MemeCoin frenzy erupted, with Pepe the Frog (the PEPE token launched on April 14, 2023) becoming a representative and various derivative MemeCoins capturing the attention of the entire cryptocurrency community. With PEPE successfully listed on Binance on May 6, its market capitalization reached an all-time high.

In June, the SEC began making moves again, but people seemed more concerned about whether CZ would go to jail, while some were focused on the progress of BlackRock's application for a spot Bitcoin ETF.

In July, Ripple won a partial victory in its lawsuit against the SEC, causing XRP's price to rise from $0.47 to $0.82, marking a new high since January 2018. This event also positively impacted several tokens previously classified as securities by the SEC in the SEC vs. Coinbase case (such as SOL, MATIC, ADA, XLM, etc.).

In August, Grayscale also won its lawsuit against the SEC, which seemed to lay some groundwork for the subsequent approval of BlackRock's Bitcoin spot ETF, as Grayscale's victory could be seen as accelerating the SEC's approval trend.

In November, CZ decided to enter prison, signing a plea agreement, while Binance paid up to $4.3 billion in fines to the U.S. Treasury.

December belonged to the high point of inscriptions, as the Bitcoin network's daily transaction fees exceeded Ethereum's due to a surge in Ordinals transactions. Then, the Meme craze in the Solana ecosystem ignited, leading to another explosion of wealth creation through MemeCoins.

In January 2023, Bitcoin's opening price was $16547.91, in December 2023, the closing price was $42265.19, and the highest price that year was $44705.52.

(16) In 2024, Bitcoin's highest value was $108268.45

This year, we finally welcomed the long-awaited bull market again, with the BTC ETF officially approved in January, and the price of BTC successfully breaking $100,000 in December, marking new milestones for Bitcoin.

In the future, Bitcoin will be unstoppable. As we mentioned in the previous article (January 1): the cryptocurrency field may welcome or begin to enter a new era, and each of us will become participants and witnesses.

The above is just a personal record and recollection; there may be some omissions. If I missed any important events, please feel free to leave a comment to supplement. Thank you!