Back in the 2000s, the only game in town for cryptos was Bitcoin. These days, there are so many coins that newcomers need guides to help them decide which ones to buy. Each crypto has its own uses, advantages, drawbacks, and support base. So how did we figure out which one is best?
The original cryptocurrency may be “ecash”, first designed back in the 1980s. It stored records on the user’s computer as cryptographically signed money. It could be spent in stores that accepted it, and in the 1990s it was implemented by only one American bank and several European ones.
It wasn’t until 2008, when an anonymous figure known as Satoshi Nakamoto published his now-famous Bitcoin paper. The timing was right for a new currency, with the flourishing of the internet and e-commerce. The mobile revolution was just beginning, too, and electronic, mobile payments would become popular over the next decade.
However, Bitcoin did not garner much attention from the public except as a form of payment for illicit material, goods, and services on the dark web. The unfortunate coupling of cryptocurrency with illegal economies in the public mind caused cryptocurrencies to remain relatively obscure.
There were, however, initiatives to push for more cryptocurrency innovation, such as the November 2013 Congressional Hearing and its positive comments, merely a month after Silk Road, the notorious dark web market famous for using Bitcoin, was shut down.
How News Affects the Prices
As with many products and services, new information affects value. This is certainly true in finance, and news about cryptos affects prices constantly. The Mt Gox hack in 2014 shattered faith in the unregulated, decentralized system of cryptocurrency, causing the price of Bitcoin to crash from a high of $1163 to just $387. But this wouldn’t be the last time news affected cryptocurrency.
In 2017, prices rose considerably over the year. But in the 4th quarter, media hype and the public’s sudden interest in the price appreciation caused a spike, with prices rocketing through $10,000 in November 2017. By mid-December, when the major financial institution CBOE launched Bitcoin futures, the price hit nearly $17,000. A 70% appreciation in just two weeks.
The huge run-up in prices and consequent public interest fueled headlines of taxation and regulation, and the rumors of crackdowns by sovereign nations, as well as well-founded speculation of a bubble, caused the price to collapse to under $8,000 by February 2018.
Even if the craze has subsided, cryptocurrencies are here to stay. And you can be assured that news will continue to affect their prices, just as it does with anything in finance. You can see a well-illustrated history of cryptocurrencies from the inception of Bitcoin until April 2018 in this infographic.