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Who remembers 2013? Bitcoin’s First Amazing Bull Run

Avatar newsbtc 2 years ago

For me, 2013 has long stayed in my memory as a year that affected me personally – a year where one key event happened which impacted me directly.  Looking back on it now though it seems that history has repeated itself.

Firstly, though he wasn’t a new President, Obama was sworn in for his second term in the White House and once again this year we saw a new POTUS take charge.  Secondly, we also had a North Korean nuclear test that year, causing outrage but not to the extent that leads to the heated exchanges of words which we saw this year. We also had a number of catastrophic storms back in 2013 with the tornado in Moores, Oklahoma being particularly devastating.

But there were two things in particular that come to mind that are a carbon copy of 2013, one is the ever-approaching potential shut down of the US Government in December and the second is the incredible bull run of bitcoin.

2013- The “Year of The Bitcoin”

In 2013, the now infamous cryptocurrency was only 5 years old, but this was the time it first started to gain real attention from the market.  In January 2013, Bitcoin was trading around $12.15 per coin and had yet to show up on anyone’s radar. Then a financial crisis occurred in March which kick-started an incredible run for the remainder of the year.

In March 2013 a financial crisis gripped the small Mediterranean island of Cyprus, where the country needed to request $13billion bailout from the European Union and the International Monetary fund.  However, the terms of the rescue package were that Cyprus Central Bank had to raise $7.5 billion by taxing bank deposits. Cash restrictions on the populous were implemented to avoid a potential bank run and large depositors ended up losing as much 10% of their held capital. One of the major retail banks was forced to close and banks across the country followed suit for a number of weeks. Living in Cyprus as I do, and did at the time, this period was no pleasant experience.

An Alternative?

Despite Cyprus only having a population of under 1 million, these events caught the attention of the media all over the globe and was in many a headline. But it also caused people to take note of the potential of bitcoin.  Due to what had happened with the Cypriot Banks, bitcoin started to gain in popularity due to the fact that it was unregulated, and no government or bank could touch it. At the beginning of March, that year Bitcoin was already outperforming most traditional currencies and trading at around $32.20 per coin, by the end of March following the Cyprus crisis it has risen to $90.52 per coin.  In April 2013 it continueditst move higher, touching an all-time high of the time of $234.52. The following months it traded between at its lowest $66.83 and highest $196.24. Then suddenly in November 2013 it exploded. At the beginning of the month, Bitcoin opened at $194.42 per coin. By the end of the month it closed at a huge $1113.06 per coin. For the first time, 2013 was hailed the year of bitcoin.

It went on the following month to hit a new high of $1242 per coin due to increased demand from consumers in China until the Chinese Government finally decided that enough was enough and stepped in, barring all banks from handling bitcoin transactions. In the aftermath of the intervention, bitcoin collapsed the following year hitting a low of $100.91 per coin in August 2014.  However, this was the lowest it would drop to. From there, over the next two years it traded fairly evenly till January 2017 and, well, we all know what has happened since then.

Looking to the Future

Now the question to ask of course is will we see a repeat of what happened at the tail end of 2013?

First of all, like 2013 we have had further intervention by the Chinese authorities and other Governments, but as of yet it still hasn’t stopped this year’s incredible bull run. We have also seen many voices crying out “bubble” and “scam” but again bitcoin traders have brushed this off. The biggest difference between this year and 2013 is that despite the skeptics we are now seeing some real players in the market start to embrace Bitcoin, with the CME Group the latest exchange to announce its intention to launch bitcoin future contracts.

Will we have a reversal with bitcoin like we saw at the end of 2013? Only time for sure will tell but as long as the interest in this cryptocurrency continues, the chances that bitcoin could keep on rising will remain intact.

AuthorJames Trescothick, Senior Global Strategist at Easy Markets
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