Bitcoin. The cryptocurrency has reached its lowest level since the end of 2020.
[Mise à jour du lundi 13 juin 2022 à 12h08] After peaking at $68,000 in November 2021, virtual currency is struggling again at the start of the week. This Monday, the price of bitcoin fell by more than 10% to 24,580 dollars around 8:40 a.m. The cryptocurrency thus recorded a lowest level since December 2020. The fall appears dizzying compared to the highest reached in November 2021: -65%. According to the Coingecko site, which lists more than 13,000 cryptocurrencies, the market is now worth 1,000 billion dollars. This decrease is cyclical. The US Federal Bank confirmed the tightening of its monetary policy, leading to a rise in key rates. Objective displayed, contains galloping inflation, resulting from the economic recovery and accelerated by the war in Ukraine. The drop in bitcoin is also attributed to the suspension of withdrawals from the Celsius platform, which until now allows investing in virtual currencies.
This is not the first time that bitcoin has experienced such a drop. It had already fallen below the $30,000 threshold in June and July 2021. Several factors explain this sharp drop. Investors are moving away from risky assets in an environment dominated by the war in Ukraine, the tightening of health policy in China and the tightening of monetary policy in the United States.
Bitcoin is the cryptocurrency with the highest valuation. But it is also the name of a blockchain protocol that allows peer-to-peer transactions to be carried out transparently and securely.
There is no official bitcoin value. This indicator is only an average of bitcoin prices (usually in dollars) on all cryptocurrency exchange platforms in the world. There are several sites that use this method, the most famous of which is CoinmarketCap. The price of bitcoin is simply governed by the law of supply and demand. Note that it is always difficult to explain why the price suddenly increases or decreases.
Since its creation, the price of bitcoin has been known to vary widely. 2017 was a particularly eventful year for the cryptocurrency star. It went from $1,000 to $19,000 in one year. Its historic level was reached in November 2021, exceeding $68,000.
Bitcoin price history
The bitcoin price began to be listed in early 2011, two years after its inception. It is most often expressed in dollars or euros, but it can also be found in yen or yuan because Asians are very fond of crypto-currencies. Here is the history of the bitcoin price in dollars.
Before buying bitcoins, it is important to keep in mind that, as with any risky asset, you should not invest more than you can afford to lose. Strictly speaking, there is no bitcoin account like there are bank accounts. To obtain bitcoins, you must open an account on a crypto-currency exchange platform (there are about a hundred of them today in the world). In general, it is possible to buy them by card or by bank transfer.
In France, there are a handful of players: the Paymium exchanges (bitcoin/euro exchange), Zebitex (multi-crypto/euros), Savitar and the brokers Coinhouse and ZeBitcoin. French citizens can buy bitcoins on foreign platforms, such as the American Coinbase which is available in French. Some are more ergonomic than others. Commissions also vary from platform to platform. The bitcoin.fr site regularly updates a ranking of platforms, listing in particular the number of positive and negative opinions.
Bitcoin is a virtual currency created in 2009 by an unidentified person whose pseudonym is Satoshi Nakamoto. Unlike conventional currencies (also known as fiat currencies), bitcoin is not issued and administered by a banking authority. It is issued on the blockchain protocol of the same name. This technology makes it possible to store and transmit information transparently, securely and without a central control body. Bitcoin, like many other cryptocurrencies, is brought into circulation through mining. “Miners”, people spread all over the world, perform mathematical calculations with their computer hardware for the bitcoin network to confirm transactions and increase their security. In exchange, they receive bitcoins. They can then be converted into fiat currency or exchanged for other cryptocurrencies on exchanges.
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The issuance of bitcoins is limited to 21 million units, as was foreseen in the initial code. This amount should be reached in 2140. At the beginning of 2018, the number of bitcoins issued passed the 17 million mark, or 80% of the total. Due to the difficulty of computational growth, bitcoin is growing at a decreasing rate: 12.5 bitcoins every ten minutes today (compared to 50 bitcoins in 2009). Note that the smallest division of bitcoin is the satoshi. 1 satoshi = 0.00000001 bitcoins.
There are bitcoin billionaires. Due to the necessity of the course, it is therefore difficult to say exactly how much their fortune amounts to in dollars or euros. According to the specialized site Decrypt, the biggest holder of bitcoins would be Micree Zhan, the co-founder of the mining giant Bitmain. In the list of crypto-millionaires, we find in particular:
- The Winklevoss brothers: founders of the crypto exchange Gemini (also known for their conflict with Mark Zuckerberg, CEO of Facebook)
- Michaël Saylor: the boss of the software publisher Microstrategy (part of whose balance sheet is also in bitcoin)
- Changpeng Zhao: CEO of Binance, the largest cryptocurrency exchange by volume
- Tim Draper: investor Tim Draper
- Brian Armstrong, CEO of Coinbase, the very popular American crypto exchange.
But the biggest holder of bitcoins would actually be… Satoshi Nakamoto, the creator of bitcoin, who has still not been identified. According to several estimates, he owned 1.1 million bitcoins.
Bitcoin is used all over the world. The countries generate a good part of the transactions, mainly in an investment logic. Countries with high inflation are bitcoin users, such as Argentina and Venezuela. On the other hand, some countries have banned the buying and selling of bitcoins. This is particularly the case in Pakistan, Algeria, Bangladesh and even Saudi Arabia. Since bitcoin cannot really be banned due to its decentralized nature, it is still possible to obtain it, on peer-to-peer sites for example.
The halving is an event during which the reward of the miners who created bitcoin will be halved. This event takes place approximately every four years. The last halving, which dates from May 11, 2020, reduced this reward from 12.5 to 6.25. This is the third halving since the creation of the cryptocurrency star in 2009, after those of November 2012 and July 2016. During the next halving, the mining premium will therefore increase to 3,125 bitcoins. And so on… This scheme will make it possible to reach the maximum of 21 million bitcoins in circulation by 2140, as predicted by Satoshi Nakamoto, anonymous creator of Bitcoin.
Today, there are 18.3 million bitcoins in circulation. The halving is also synonymous with a rise in the price of bitcoin. In any case, this is what happened for the first two halvings. No wonder, since bitcoin, like many assets, depends on supply and demand. And with a falling supply, its price tends to rise. For the third, the pattern did not repeat itself as bitcoin lost 2% to settle at $8,560. It must be said that this halving a place in a rather particular context linked to the coronavirus epidemic.
Once you have purchased bitcoins, it is possible to store them in a wallet, physical or digital e-wallet. It avoids the risks of hacking which crypto-currency platforms may be victims of. It includes two elements: a public key, known to all, which corresponds to a bitcoin address, and a private key, known only to the holder of the wallet. Physical wallets look like USB drives. Two big players are competing for the market, the French Ledger and the Czech Trezor. Digital wallets, software wallets, can be accessed on computer, mobile and desktop. Some examples of software wallets: ArcBit, BitGo, Electrum, Mycelium…