Cryptocurrency has emerged as a revolutionary technology in the world of finance and economics. Unlike traditional forms of currency, cryptocurrencies are digital or virtual and use encryption techniques to secure and verify transactions. The cryptocurrency market has seen explosive growth in recent years, with the total market capitalization of $1.24 trillion now.
In the 1980s, the concept of cryptocurrencies first emerged. It was intended to send money that couldn’t be tracked and didn’t need to be centralised.
American cryptographer “David Chaum” invented a form of anonymous currency called DigiCash. It was the first electronic payment method that needed software and encryption keys to send and receive money.
The blockchain network and its technologies were outlined in “Satoshi Nakamoto’s” white paper Bitcoin – A Peer-to-Peer Electronic Cash System, which was released in 1998. Bitcoin, according to him, is “an electronic payment system based on cryptographic proof instead of trust.”
Bitcoin began to steadily rise, and remains the dominant cryptocurrency, accounting for around 45.5% of the total market capitalization.
Other cryptocurrencies such as Ethereum, Binance Coin, Dogecoin, and XRP have also seen significant growth in their market capitalization.
The cryptocurrency market has experienced a massive surge in popularity in recent years, and their prices have been a topic of much discussion.
The prices of cryptocurrencies are known to fluctuate wildly, sometimes rising by hundreds or even thousands of dollars in a matter of hours.
This has led many people to wonder how the price of a cryptocurrency rises and what factors contribute to this phenomenon.
Bitcoin’s price history provides an excellent case study on the rise of cryptocurrency prices. In 2010, Bitcoin was trading at less than $1. By 2017, the price of Bitcoin had surged to almost $20,000, representing an over 20,000% increase in its price.
However, the price later crashed, falling to around $3,000 in 2018. Despite the ups and downs, Bitcoin’s price has since recovered, now trading over $30,000 and predicted to rise higher.
Another example is Ethereum, which saw its price rise from around $10 in early 2017 to over $2,000 in May 2021.
This rise was largely due to increased adoption and acceptance of the cryptocurrency, as well as speculation about the potential of ethereum’s ambitiously developing blockchain.
While these factors can contribute to the rise in price, they can also lead to significant fluctuations and volatility in the cryptocurrency market. Despite its volatile nature, Bitcoin has proven to be a valuable investment for many, with some investors making significant profits.