In the last 10 years, from July 2014 to today, the asset Bitcoin has recorded impressive performance regarding its price.
On July 16, 2014, it closed the day at around $617, while yesterday it closed just above $65,000. So in the last 10 years, the performance of its price has been over +10,000%.
The cycles of Bitcoin
Bitcoin was born on January 3, 2009, when Satoshi Nakamoto mined the first block of its blockchain.
At the time, it was not possible to exchange BTC for dollars or other fiat currencies, so in fact its market value was zero. At most, it was possible to convince someone to accept BTC as payment, as happened on May 22, 2010, when the first known payment in Bitcoin was made.
Also in 2010, however, the first exchanges opened, that is, platforms that allowed the purchase and sale of BTC in dollars, and then in other fiat currencies.
Every 210,000 blocks mined on the Bitcoin blockchain, the rate of creation of new BTC is halved. That event is called halving, and it occurs approximately every 3 years and 10 months.
The cycles of Bitcoin are marked by the halving, and since the fourth halving occurred in April of this year, we have entered the fifth cycle of Bitcoin.
The first halving occurred in November 2012, so by July 2014, the second cycle was already underway. Generally, it is not common to use the price values of Bitcoin during the first cycle as a reference because they were excessively low.
The speculative bull
Until now, in all three previous cases, the halving was followed months later by a speculative bubble inflated on the price of Bitcoin.
In all three cases, the bubble then burst, but after the burst, the price always remained higher than it was before the bubble started to inflate.
Generally, the bubble starts to inflate more or less in the month when the presidential elections take place in the USA, as it is driven by the decline in the strength of the US dollar, which rises before the elections and then falls afterwards.
And so after the halving of November 2012, and the US presidential elections of the same month, the price of Bitcoin during 2013 started to rise, so much so that the first sensational bubble inflated. That bubble took the price of BTC from $10 to over $1,000, and then it burst in 2014.
So in July 2014, the first speculative bubble inflated on the price of BTC had already burst, although not completely. In fact, the price of Bitcoin during the following year fell even below $200.
To drive up the price of Bitcoin by +10,000$ in the following years were two other speculative bubbles, both inflated after the halving and especially after the US elections of 2016 and 2020.
The current price level is in line with the highs reached during the speculative bubble of 2021.
The other assets in comparison with the price of Bitcoin
In 2014, there were very few other cryptocurrencies.
Ethereum for example did not exist, and even USDT was still only taking its first steps. Among the current top ten cryptocurrencies by market capitalization, in July 2014 besides Bitcoin there were only XRP (Ripple) and Dogecoin.
Among the top 20, besides these three, there was only Litecoin.
This explains why there are no cryptocurrencies whose price has performed better than Bitcoin in the last 10 years, or why it has actually performed worse, or why ten years ago they simply did not yet exist.
However, there are some assets in the traditional financial markets that have performed even better since July 2014.
It is the case of Nvidia, whose stock price on the market has gone from about 0.5$ to over 125$, with an incredible +24,000%.
The discourse changes only if instead of starting from July 2014, to calculate the gains in exactly ten years, one starts from 2012, that is, before the first halving of Bitcoin occurred.
Taking as a reference the prices on October 31, 2012, which is the closing of the previous month to the first halving and the US presidential elections of that year, Bitcoin to date has recorded an incredible gain of almost +650,000%, given that it was worth about $10 at that time.
Nvidia for example since then “stops” at a +39,000%.
The decline over time
Regarding Bitcoin cycles, it is evident that each individual bubble has generated increasingly lower percentage gains.
The first one, in 2013, caused the price of Bitcoin to jump by 50,000% from the lows, followed by a drop of 86%.
The second, in 2017, caused a jump of 12,000% from the lows, followed by another drop of 84%.
The third, in 2021, generated a rise of 2,000% from the lows, and was followed by a drop of 77%.
It is worth noting that even this last drop has now been completely recovered, so much so that in March of this year the price reached its new all-time high.
Therefore, excluding the first bull, the gain acquired over time drops significantly, while still remaining very high.
Taking instead as a reference only the maximum peaks, that of 2017 was 1,500% higher than that of 2013, and that of 2021 was 260% higher than that of 2017.
For Nvidia for example, the path has been different.
The first strong growth, of 2,500%, occurred between 2016 and 2017, almost simultaneously with the second Bitcoin speculative bubble.
The second, of 380%, occurred between 2020 and 2021, almost simultaneously with the second speculative bubble of Bitcoin.
However, there was a third one, the most sensational in some ways, between 2023 and 2024 that generated an additional +260% apparently in the absence of a speculative bubble.
It is worth noting that the price of BTC is currently in line with the highs of the 2021 bubble, while that of Nvidia shares is at +260% from the highs of the same period.
