The price of Bitcoin has been rising since its creation. The real value of Bitcoin lies in its usage.

Golden Finance News - Bitcoin has been in existence for less than a decade, but it has already achieved incredible popularity around the world, and its value has increased as Bitcoin has been used.

Investors could buy one bitcoin for less than a cent when it was first created in 2009. Now, with a bitcoin valued at around $1,250, many believe its upward trend could continue indefinitely.

(After years of development, the price of Bitcoin has risen to over $1,000. Image source: Golden Finance)

Despite a great deal of skepticism about Bitcoin’s inherent value, Bitcoin has managed to survive wild price swings without losing value among its core users.

Bitcoin price history

In the first few years of its existence, the price of Bitcoin rose dramatically. From a valuation of one cent in 2009, Bitcoin rose to $0.10 by 2010 and reached $1 for the first time in early 2011. This triggered a large wave of new demand for Bitcoin, and the price of Bitcoin rose to over $10 by mid-2011.

However, at this point, Bitcoin has also shown its tendency to rise and fall dramatically. In just a few months, the price of Bitcoin has fallen by 80%, punishing those who had entered the market at a high price and were looking for rapid growth in the coin's price.

Still, those who stuck with Bitcoin from the beginning made a profit of $10 by the end of 2012.

(Bitcoin prices have been rising all the time. Image source: Golden Finance)

From there, new market demand pushed the price of Bitcoin to over $100, climbing to nearly $200 by early 2013.

The collapse of the Mt Gox bitcoin exchange had a brutal impact on the price of bitcoin, cutting its value in half, but before the end of the year, the price of bitcoin climbed back above $1,000.

Because market participants increasingly believe that Bitcoin will achieve global currency status and prove to be a better alternative to traditional government-issued fiat currencies.

In the first few years of Bitcoin’s history, the global financial crisis fueled the theory that Bitcoin could become a world currency, increasing its appeal.

Since then, Bitcoin prices have still fluctuated, but not as dramatically as before.

In 2015, the price of Bitcoin fell to around $200, but the currency has recently recovered. This year, Bitcoin has regained the $1,000 level, rising as high as nearly $1,300.

The True Value of Bitcoin

One concern some people have about Bitcoin is that it has no intrinsic value. In contrast, gold investors take comfort in the fact that the price of gold exceeds the value of the coin.

(The real value of Bitcoin lies in its circulation and use. Image source: Golden Finance)

This is not the case with Bitcoin. Yet Bitcoin advocates note that this is also true of the paper money people use every day.

It used to be that the Federal Reserve’s notes were pegged to the value of gold or silver, but those days are over. Just as a dollar bill only has value assigned by the buyer and seller, Bitcoin has utility value because those exchanging the digital currency agree on its value.

One reason Bitcoin is becoming more valuable is that you can now use it for multiple transactions earlier. Many major technology and retail companies accept Bitcoin just like old currencies, and small businesses are also supporting the rise of Bitcoin.

In addition, due to the relatively low transaction fees for transferring money, Bitcoin has become a workaround for users to avoid expensive fees charged by banks and other financial institutions.

Focus on Bitcoin

Bitcoin has seen massive gains recently, but one thing Bitcoin investors can be sure of is that volatility in two directions will continue.

Some are calling for Bitcoin’s value to continue to grow exponentially; others are calling it a bubble waiting to burst.

Regardless, the Bitcoin market is sure to be exciting for the foreseeable future.