What is the bitcoin price

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We help you find the latest Bitcoin price, Ethereum price, EOS price along with the top 20 cryptocurrency prices by market cap. You can also compare it to other assets including the S&P 500. We also have historical bitcoin charts comparing the price of bitcoin to USD along with bitcoin price predictions.

What Is the Price of Bitcoin?

When people talk about the price of Bitcoin, they are referring to the current price at which Bitcoin is changing hands. Since Bitcoin is a purely speculative asset, this price is determined by how little sellers are willing to charge and how much buyers are willing to pay. Even then, the price of Bitcoin can vary across exchanges like Coinbase and Binance or currencies because of market inefficiencies

The price of Bitcoin is constantly changing and is closely monitored by a number of banks, financial institutions, and retail investors. Our website shows you the average price of Bitcoin across major exchanges in the currency of your choice, with updates every 30 seconds.

Bitcoin Price History in 2020

MONTH	HIGH	LOW
December 2020	$28,891.61 (December 31)	$18,250.47 (December 12)
November 2020	$19,157.16 (November 25)	$13,571.24 (November 3, 2020)
October 2020	$13,646.02 (October 28, 2020)	$10,552.04 (October 4, 2020)
September 2020	$11,926.69 (September 2, 2020)	$10,174.62 (September 4, 2020)
August 2020	$12,301.19 (August 8, 2020)	$11,063.50 (August 3, 2020)
July 2020	$11,113.66 (July 31, 2020)	$9081.44 (July 6, 2020)
June 2020	$10,211.23 (June 2, 2020)	$9,007.14 (June 28, 2020)
May 2020	$9,999.93 (May 8, 2020)	$8,568.88 (May 12, 2020)
April 2020	$8,784.96 (April 30, 2020)	$6,423.61 (April 1, 2020)
March 2020	$9,160.39 (March 7, 2020)	$4,916.78 (March 13, 2020)
February 2020	$10,630.37(February 15, 2020)	$8,793.50(February 27, 2020)
January 2020	$9,501.38 (January 31, 2020)	$6,965.72 (January 3, 2019)

Bitcoin Annual Closing Prices & % Return

Bitcoin Annual Closing Prices and % Returns

YEAR	CLOSING PRICE (% RETURN)
2019	$7,233.44 (93%)
2018	$3,743 (-74%)
2017	$14,156 (+1942%)
2016	$693 (+61%)
2015	$430 (+34%)
2014	$320 (-58%)
2013	$754

Biggest Moments in Bitcoin’s Price History

There have been a few defining moments for the price of Bitcoin, here are the biggest price movements:

June 2019 Bull Rally

Following the dump in November 2018, Bitcoin spent several months slowly creeping up to the $8,000 mark. Then, in the month of June alone, Bitcoin rallied to almost $13,000, eventually stabilizing around $10,000 for the coming months.

2018 End of Year Dump

Contrary to the previous year, 2018 saw a prolonged bear bias for the major cryptocurrency. However, following the closure of a 10-month long price wedge, Bitcoin fell from as much as $6,700 to below $3,700 within the single month of November.

2017 Bull Market and All Time High

2017 was a great year for Bitcoin price-wise, but the bullish price action went parabolic in the last few months of the year. Between November 1 and December 17, Bitcoin’s price skyrocketed from $6,600 to its All Time High of over $20,000 — a more than three times increase.

February 2014 Crash

Following the currency’s recent rally, there was bound to be tension in the Bitcoin price in the first months of 2014. This tension broke out when news aired that cryptocurrency exchange Mt. Gox had been hacked, causing the price to drop from around $800 to below $450.

2013 End of Year Rally

Only at the start of November 2017 did Bitcoin recover to its highs from earlier in the year, and this marked the beginning of one of Bitcoin’s most notable bull runs. By the end of the month, the price had quadrupled, although it stabilized around the $700 mark by the new year.

April 2013 Crash

In early April 2013, Bitcoin was trading for as much as $237. Overnight, it fell to just $67. This seventy-plus percent drop hit the market with a lasting effect, as it would take over six months for the price to recover to previous levels.

Bitcoin Price FAQ (Frequently Asked Questions)

How is the price of Bitcoin determined?

The price of Bitcoin is determined by how little sellers are willing to charge (the ask price) and how much buyers are willing to pay (the bid price). When these prices overlap, a trade occurs representing the current price at which Bitcoin is changing hands.

How often does the price of Bitcoin change?

The price of Bitcoin is constantly changing, with every new trade that is made. Our platform updates the price information every 30 seconds. The cryptocurrency price data on BitcoinPrice.com is based on CryptoCompare’s API. The data is an aggregate of cryptocurrency exchange prices from around the world.

Is the price of Bitcoin the same across the world?

Due to market inefficiencies, it’s possible that Bitcoin is traded for different prices at the same time in different parts of the world. This discrepancy can increase if it becomes harder for buyers in a certain geographical location or using a certain currency to buy Bitcoin.

What is the difference between bid and ask prices?

The bid price is the price at which buyers are willing to buy Bitcoin, and the ask price is the price at which sellers are willing to sell Bitcoin. A trade only occurs, thereby changing the price of Bitcoin, when these prices overlap.

How does Bitcoin work?

The big record book or ledger is called a blockchain. The file size of blockchain is quite small, similar to the size of a text message on your phone.

Every Bitcoin blockchain has three parts; its identifying address (of approximately 34 characters), the history of who has bought and sold it (the ledger) and its third part is the private key header log.

The first two parts are quite easy to understand. The third one is a bit complex – this is where a sophisticated digital signature is captured to confirm each and every transaction for that particular Bitcoin file. Each digital signature is unique to each individual user and his/her personal Bitcoin wallet.

Each and every trade of Bitcoin is tracked and publicly disclosed, with each participant’s digital signature attached to the Bitcoin blockchain as a confirmation.

These trades can be found at blockchain.info.

This also means people can see the history of your Bitcoin wallet which is a good thing because it adds transparency and security. Also, it helps deter people from using Bitcoins for illegal purposes.

The integrity and chronological order of the blockchain is enforced with cryptography. In addition to archiving transactions, each new ledger update creates some newly-minted Bitcoins.

The number of new Bitcoins created in each update is halved every 4 years until the year 2140 when this number will round down to zero. At that time no more Bitcoins will be added to circulation and the total number of Bitcoins will have reached a maximum of 21 million.

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What Determines the Price of 1 Bitcoin?

What Determines Bitcoin’s Price?

Bitcoin is a cryptocurrency developed in 2009 by Satoshi Nakamoto, the name given to the unknown creator (or creators) of this virtual currency. Transactions are recorded in a blockchain, which shows the transaction history for each unit and is used to prove ownership.

Unlike investing in traditional currencies, bitcoin is not issued by a central bank or backed by a government. And buying a bitcoin is different than purchasing a stock or bond because bitcoin is not a corporation. Consequently, there are no corporate balance sheets or Form 10-Ks to review.

Key Takeaways

• Purchasing stocks grants you ownership in a company, whereas purchasing bitcoin grants you ownership of that cryptocurrency.
• Bitcoin is neither issued nor regulated by a central government and therefore is not subject to governmental monetary policies.
• Bitcoin prices are primarily affected by its supply, the market’s demand for it, availability, and competing cryptocurrencies.
• As of December 2020, approximately 88.5% of the total bitcoin supply had been mined.

Understanding What Determines Bitcoin’s Price

Unlike investing in traditional currencies, bitcoin is not issued by a central bank or backed by a government; therefore, the monetary policy, inflation rates, and economic growth measurements that typically influence the value of currency do not apply to bitcoin. Contrarily, bitcoin prices are influenced by the following factors:

• The supply of bitcoin and the market’s demand for it
• The cost of producing a bitcoin through the mining process
• The rewards issued to bitcoin miners for verifying transactions to the blockchain
• The number of competing cryptocurrencies
• The exchanges it trades on
• Regulations governing its sale
• Its internal governance

Supply and Demand

Countries without fixed foreign exchange rates can partially control how much of their currency circulates by adjusting the discount rate, changing reserve requirements, or engaging in open-market operations. With these options, a central bank can potentially impact a currency’s exchange rate.

The supply of bitcoin is impacted in two different ways. First, the bitcoin protocol allows new bitcoins to be created at a fixed rate. New bitcoins are introduced into the market when miners process blocks of transactions, and the rate at which new coins are introduced is designed to slow over time. For example, growth slowed from 6.9% (2016), to 4.4% (2017) to 4.0% (2018). This can create scenarios in which the demand for bitcoins increases at a faster rate than the supply increases, which can drive up the price. The slowing of bitcoin circulation growth is due to the halving of block rewards offered to bitcoin miners and can be thought of as artificial inflation for the cryptocurrency ecosystem.

Secondly, supply may also be impacted by the number of bitcoins the system allows to exist. This number is capped at 21 million, where once this number is reached, mining activities will no longer create new bitcoins. For example, the supply of bitcoin reached 18.587 million in December 2020, representing 88.5% of the supply of bitcoin that will ultimately be made available. Once 21 million bitcoins are in circulation, prices depend on whether it is considered practical (readily usable in transactions), legal, and in demand, which is determined by the popularity of other cryptocurrencies.

El Salvador made Bitcoin legal tender on June 9, 2021. It is the first country to do so. The cryptocurrency can be used for any transaction where the business can accept it. The U.S. dollar continues to be El Salvador’s primary currency.

The artificial inflation mechanism of the halving of block rewards will no longer have an impact on the price of the cryptocurrency. However, at the current rate of adjustment of block rewards, the last bitcoin is not set to be mined until the year 2140 or so.

Competition

While bitcoin may be the most well-known cryptocurrency, there are hundreds of other tokens vying for user attention. While bitcoin is still the dominant option concerning market capitalization, altcoins including Ethereum (ETH), Tether (USDT), Binance Coin (BNB), Cardano (ADA), and Polkadot (DOT) are among its closest competitors as of March 2021. Further, new initial coin offerings (ICOs) are constantly on the horizon due to the relatively few barriers to entry. The crowded field is good news for investors because the widespread competition keeps prices down. Fortunately for bitcoin, its high visibility gives it an edge over its competitors.

Cost of Production

While bitcoins are virtual, they are nonetheless produced products and incur a real cost of production—with electricity consumption being the most important factor by far. Bitcoin «mining» as it is called, relies on a complicated cryptographic math problem that miners all compete to solve—the first one to do so is rewarded with a block of newly minted bitcoins and any transaction fees that have been accumulated since the last block was found.

What is unique about bitcoin production is that unlike other produced goods, bitcoin’s algorithm only allows for one block of bitcoins to be found, on average, once every ten minutes. That means the more producers (miners) that join in the competition for solving the math problem only have the effect of making that problem more difficult—and thus more expensive—to solve in order to preserve that ten-minute interval.

Research has shown that bitcoin’s market price is closely related to its marginal cost of production.

Availability on Currency Exchanges

Just as equity investors trade stocks over indexes like the NYSE, Nasdaq, and the FTSE, cryptocurrency investors trade cryptocurrencies over Coinbase, GDAX, and other exchanges. Similar to traditional currency exchanges, these platforms let investors trade cryptocurrency/currency pairs (e.g. BTC/USD or bitcoin/U.S. dollar).

The more popular an exchange becomes, the easier it may draw in additional participants to create a network effect. And by capitalizing on its market clout, it may set rules governing how other currencies are added. For example, the release of the Simple Agreement for Future Tokens (SAFT) framework seeks to define how ICOs could comply with securities regulations. Bitcoin’s presence on these exchanges implies a level of regulatory compliance, regardless of the legal gray area in which cryptocurrencies operate.

Regulations and Legal Matters

The rapid rise in the popularity of bitcoin and other cryptocurrencies has caused regulators to debate how to classify such digital assets. While the Securities and Exchange Commission (SEC) classifies cryptocurrencies as securities, the U.S. Commodity Futures Trading Commission (CFTC) considers bitcoin to be a commodity. This confusion over which regulator will set the rules for cryptocurrencies has created uncertainty—despite the surging market capitalizations.

Furthermore, the market has witnessed the rollout of many financial products that use bitcoin as an underlying asset, such as exchange-traded funds (ETFs), futures, and other derivatives.

This can impact prices in two ways. First, it provides bitcoin access to investors who cannot afford to purchase an actual bitcoin, thus increasing demand. Second, it can reduce price volatility by allowing institutional investors who believe bitcoin futures are overvalued or undervalued, to use their substantial resources to make bets that bitcoin’s price will move in the opposite direction.

Forks and Governance Stability

Because bitcoin is not governed by a central authority, it relies on developers and miners to process transactions and keep the blockchain secure. Software changes are consensus-driven, which tends to frustrate the bitcoin community, as fundamental issues typically take a long time to resolve.

The issue of scalability has been a particular pain point. The number of transactions that can be processed depends on the size of blocks, and bitcoin software is currently only able to process approximately three transactions per second. While this wasn’t a concern when there was little demand for cryptocurrencies, many worry that slow transaction speeds will push investors towards competitive cryptocurrencies.

The community is divided over the best way to increase the number of transactions. Changes to the rules governing the use of the underlying software are called “forks.” “Soft forks” pertain to rule changes that do not result in the creation of a new cryptocurrency, while “hard fork” software changes result in new cryptocurrencies. Past bitcoin hard forks have included bitcoin cash and bitcoin gold.

What Gives Bitcoin Value FAQs

How Is Bitcoin Value Calculated?

Bitcoin’s value is largely dependent on its supply and the market’s demand for it. Its value is also attributed to other factors, such as alternative digital currencies—including their supply and price—availability, and rewards for mining. Intrinsic value can also be estimated by computing the average marginal cost of production of a bitcoin at any given point in time, based on the block reward, price of electricity, energy efficiency of mining hardware, and the mining difficulty.

How Does Bitcoin Increase in Value?

As bitcoin nears its maximum limit, demand for it increases. The increased demand and limited supply push the price per bitcoin upward. Also, more institutions are investing in bitcoin and accepting it as a form of payment, thereby increasing its utility and making it a preferred medium of exchange among consumers.

Bitcoin is relatively safe due to cryptography and robust protocols and readily available through several exchanges. Also, you need not purchase a full bitcoin to have ownership of it. Fractional shares are available, increasing its attractiveness and value.

How Does Bitcoin Make Money?

Unlike stock, bitcoin does not represent ownership in a company or entity. Owning bitcoin is owning digital currency, much like owning US$1 is owning paper currency. Bitcoin miners earn rewards for completing blocks of verified transactions, and owners of bitcoin make money as the price per coin increases. For example, if you purchased 100 coins at $65.52 (100 x $65.52 = $6,552) on July 5, 2013 (bitcoin’s record low) and held it until its all-time high of $61,683.86 on March 13, 2021, you would have $6,168,386. 

Why Is Bitcoin So Valuable?

The demand for bitcoin is increasing, whereas the availability of new supply is shrinking, with the size of each block reduced by half, on average, every four years and the final bitcoin to be mined somewhere around the year 2140. Indeed, unlike most other produced goods, the rate of supply of new bitcoins cannot increase in response to spikes in demand.

A supply and demand imbalance results in increased prices. Some consumers, companies, and investors favor bitcoin for this and the potential ability to hedge inflation. The resulting popularity contributes to increased demand, and thus an increased price.

What Makes Bitcoin Prices Go Up and Down?

Bitcoin’s price fluctuates for various reasons, including media coverage, speculation, and availability. With negative press, some bitcoin owners panic and sell their shares, driving down the price. Vice versa with positive press. Also, when the volume of bitcoin sold on the market increases, the price decreases. As more institutions adopt bitcoin as an investment and medium of exchange, its price increases.

Also, many people have eroded confidence in their fiat currency and seek alternative sources to store their money. Because bitcoin is decentralized and unregulated, it is a favorable alternative, thus driving up its price.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author does not own bitcoin.

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