Bitcoin’s beginnings in 2009 contained bitcoins being used by cryptography enthusiasts only for low or no value, thus, there were no exchanges and no market, either. This continued for about a year until January 2010.
In the next few years, the price of Bitcoin treaded slowly, starting with $1 in the first quarter of 2011. It experienced its first bubble, reaching $31 in July of that year, though a price drop subsequently took place, going down to $2 after a few months.
By April 2013, the value went steady at $266. This was the time that the value was growing up to 5-10% daily, dropping again to over $100 in the following months.
On November 17, 2013, Bitcoin’s value rose to a staggering $1,216.73, though the price subsequently plunged down to the $700 range.
Currently, Bitcoin’s value is at $200 plus, hitting its lowest of over $100 in the beginning of January 2015. With the erratic behavior of prices, Bitcoin’s volatility has gained worries for some; all have the same thing in mind:
“Where is Bitcoin going with the unstable prices? Will this eventually take its toll on all users, traders and investors?” Unfortunately, it’s neither early nor late to tell.
What’s apparent is that the downward trend after exceeding the phenomenal $1,000 mark in late 2013 continues to occur in the present. Though the market is increasing with a more promising merchant adoption on the rise, bitcoins’ unpredictable nature still poses risks.
For some, these risks are havens of opportunities while the skeptics adamantly believe that bitcoins were already trouble since the beginning. Other observers, on the other hand, see Bitcoin as a “bubble”.
Generally, there’s no way of knowing what the fair price for Bitcoin really is. Theoretically, there’s a finite supply while there may be an infinite demand. Thus, there’s no theoretical reason why Bitcoin’s value cannot increase again.
The catch is, because Bitcoin has no inherent value, the prices could also crash permanently at any time. Until it does, speculators are likely to continue playing the game. In addition, because of its finite supply, the growing market will entail an increasing demand, which should set the price of bitcoins higher.