How many bubbles are there in the history of Bitcoin’s price rebound from 0 to 8,000?

Since I joined the Bitcoin industry, whenever a friend asks me what I’m doing, our conversation usually goes something like this:

  "What do you do now? (concerned face)"

“Blockchain Industry”

"I don't understand (confused face)"

“You’ve heard of Bitcoin, right? That’s pretty much it.”

"Wow, isn't this thing finished (curious face)"

"No, it's over 4,000 now. Do you want to buy some?"

"It's too expensive. I'll buy it if it's under 3,000 (disdainful face)"

Yes, it is too expensive, but do you know how it became so expensive? Let me explain it to you from the beginning.

  From zero to one, pizza first

January 3, 2009 was the birthday of Bitcoin. From that day until May 22, 2010, the price of Bitcoin was zero. Satoshi Nakamoto, the inventor of Bitcoin, quietly accumulated more than 1 million Bitcoins. From a price perspective, those things were just a bunch of worthless codes.

On May 22, 2010, Laszlo Honyets, a programmer from Florida, USA, successfully exchanged 10,000 bitcoins for two pizzas. The specific process was not that the pizza shop accepted the bitcoin payment, but that someone else was willing to accept these bitcoins and buy pizza on Laszlo's behalf.

In any case, this is the first time that Bitcoin has a price in the real world. Converted to today's prices, these two pizzas cost Lasler more than 6.7 million US dollars. I know that kind people are already feeling sorry for Lasler, but I want to tell you that because these pizzas are delicious, Lasler bought them three or four more times, spending a total of 40,000 Bitcoins...

  The road to counterattack: walking with the bubble

According to blockchain.info, the earliest exchange price of Bitcoin appeared on August 17, 2010, at 0.0769 cents. In the following six years, it has gone from a few cents to hundreds of dollars:

  The first bubble, from $1 to $30

Starting from a few cents, the price of Bitcoin has been climbing up in fluctuations. On April 14, 2011, the price of Bitcoin reached $1 for the first time. However, Bitcoin did not stop. It rose from $2, $5, $10, $20 to June 9, 2011, when Bitcoin ushered in its first bubble in the growth process and the price reached $30.

The peak of the bubble was the burst, and within a week, the price of Bitcoin was cut in half, followed by a long downward trend, with the lowest price of Bitcoin being less than $2 at the beginning of 2012. Then in 2012, the price of Bitcoin consolidated and rose at the bottom for the whole year.

The following chart shows the price trend of Bitcoin from January 2011 to December 2012. We can see that until December 2012, the price of Bitcoin was only a little more than one-third of the peak price of $30. In terms of time, it took Bitcoin a year and a half to recover from the bubble for the first time. Of course, the Bitcoin community was still small at that time, and the number of people affected was limited, so most people in the world had not heard of the existence of this bubble.

  Second Bubble: From $13 to $260

In 2013, due to the Cyprus banking crisis, the currency attributes of Bitcoin attracted more attention. The price of Bitcoin began to rise rapidly again, reaching a historical high of $260 on April 9, 2013, and then the bubble burst, and it plummeted to $68 a week later. On July 5, 2013, it reached the lowest point of this bubble cycle at $66.

  The third bubble: from $100 to $1,000

In October 2013, more and more companies and organizations accepted Bitcoin payments, and some European countries also introduced policies favorable to Bitcoin. In addition, the news media reported intensively. Under the combined effect of various factors, the Bitcoin bubble that has affected the most people so far came into being.

According to Coindesk data, by December 4, 2013, the price of Bitcoin reached a historical high of $1,147, exceeding the price of gold during the same period. On Huobi, a Chinese Bitcoin trading platform, the price reached a record high of 8,000 RMB.

On December 5, 2013, the People's Bank of China and five ministries jointly issued the "Notice on Preventing Bitcoin Risks". The price of Bitcoin fell immediately, and fell to $522 on December 18. Since then, it has been fluctuating downward. Until January 14, 2015, the price of Bitcoin reached the historical low of this bubble, $114. Correspondingly, the RMB price on Huobi.com was 900 yuan. From 8,000 to 900, the price fluctuation of Bitcoin can be said to be drastic.

Then Bitcoin once again entered a stage of bottom consolidation and rise. In terms of RMB, it has been more than 1,000, more than 2,000, more than 3,000, and now it has stabilized at more than 4,000. At the time of writing this article, the price of Bitcoin is 674 US dollars/4504 RMB.

  Below is another complete price chart of Bitcoin in history.

  What's hidden behind the bubble?

Have you noticed that the above pictures look so similar, except for the time and price, they are just cut from the same mold. And the protagonist is this thing - Bitcoin.

Bubbles are all similar, but prices are getting higher and higher. Why is this? Economic common sense tells us that price is a representation of value. Overall, the price of Bitcoin has been rising all the way, that is, as more and more people recognize it, the value of Bitcoin is constantly increasing.

As a trading product with no ups and downs limits and 24/7 global non-stop trading, Bitcoin is naturally an excellent speculative target, and it is also easy to give rise to bubbles. So when the fourth bubble comes, what will the price be?

Smart you, read the picture carefully, are you eager to try it?