The network of the first cryptocurrency, Bitcoin, was launched in 2009. Over the years of its existence, the unknown coin of an anonymous developer has become one of the main tools for protecting savings from inflation. At the same time, many investors wonder why Bitcoin is so expensive
We tell you what determines the price of BTC, how much bitcoin cost at the very beginning and whether it is possible to get bitcoins for free today.
Why is Bitcoin expensive
Bitcoin is the first cryptocurrency. Its concept was presented in 2008 by an anonymous developer Satoshi Nakamoto. On January 3, 2009, the first blog was generated in the cryptocurrency network. From this day on, the history of the crypto community began.
To understand why Bitcoin is expensive, you need to understand the nature of the asset and its features. Here are the reasons that push the cryptocurrency rate up.
1. Limited issue
The thing is that the BTC emission is limited. A total of 21 million coins will be issued, of which over 19.7 million have already been mined. It turns out that the supply of Bitcoin is limited. Its emission cannot be changed, which means that BTC, unlike fiat, which can be printed endlessly, is a deflationary asset.
The number of bitcoins mined (blue curve) and the bitcoin rate (black curve). Source: blockchain
As BTC's popularity grew, so did the number of potential buyers. Demand for the asset allows sellers to raise prices. This is what happened with Bitcoin.
Let us recall that the maximum value of BTC was recorded on March 14, 2024. On this day, the price of Bitcoin reached $73,750.
2. Halvings
There is another detail that underlies the growth of the cryptocurrency value. About once every 4 years, the rate of release of bitcoins decreases exactly by half. The event is called halving. The last time the rate of release of BTC from the network halved was in April 2024.
Now imagine: the demand for the asset remains the same, but the inflow of the coin itself into the market has decreased by half. Such conditions, as history shows, lead to a shortage of cryptocurrency, which pushes the BTC rate up.
The idea that halvings and Bitcoin's deflationary nature are behind its gradual growth is the basis of the Bitcoin Stock-To-Flow (S2F) theory. It suggests that slowdowns in the rate of BTC inflow into the market trigger new growth cycles. With many more halvings to come, it is possible to predict the coin's trajectory based on previous patterns.
The chart below shows the real BTC rate as a colored curve. The color reflects the distance to the next halving (the warmer the color, the closer the event). The gray curve shows the expected trajectory of the cryptocurrency, taking into account previous patterns and the expected impact of the next halvings on the rate.
3. Proven effectiveness
Bitcoin's value is also added by its proven ability to save savings from inflation in the long term. At the same time, none of the classic investment assets can compete with BTC in terms of profitability. The cryptocurrency is regularly awarded the title of the best investment asset. Therefore, every year the coin is increasingly appearing on investors' radars. For example, here's what Bitcoin looks like compared to gold:
Bitcoin and gold changes compared (purple curve). Source: TradingView
Let's sum it up. Bitcoin is so expensive because its supply is limited. Over the years, BTC has proven its effectiveness as an investment asset. Therefore, over time, interest in cryptocurrency from investors has grown significantly. There is reason to believe that BTC will continue to grow, which also supports demand for the coin. In such conditions, sellers can periodically increase prices. That is why Bitcoin is so expensive.
How much did bitcoin cost at the very beginning
BTC trading started in October 2009 on the New Liberty Standard platform. At the very beginning, Bitcoin cost about $1.3. Over time, many other trading platforms entered the market. The volume of Bitcoin trading began to grow, as did the cryptocurrency rate itself.
Bitcoin trading history since 2009. Source: calendar.bitbo
How to get bitcoin for free
A whole bitcoin, as of the time of writing the review, costs more than $65,000. It is almost impossible to get such a coin for free today, but there are exceptions. For example, the largest crypto exchange Binance periodically raffles off a whole bitcoin.
The chances of getting free satoshi — bitcoin particles — are much higher. Earlier, the BeInCrypto editorial team collected in one review the top 10 ways to become the owner of cryptocurrency without paying a penny.
