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The price of Bitcoin rose from a low of less than $4,000 in March to nearly touching $20,000 in November. How did we get here?
Panic in March
Few expected a virus just 0.125 micron in size (1/70th the size of a red blood cell) to have such an outsized impact. Still, it took two months for reality to set in financial markets, which were upended after a ban on travel from Europe by the United States in early March. On March 12, the Dow Jones Industrial Average, a widely-used measure of performance of the strongest American companies, fell by more than 10% in a single day, enduring the largest drop since Black Monday in 1987. Investors swapped cryptocurrencies alongside other assets for cash to preserve portfolio value.
Bitcoin halving
In May, Bitcoin saw its third ‘halving’ – a technical event that reduces the reward for ‘mining’, the process of bitcoin creation. Trading activity usually increases during these occasions. CoinMarketCap, a cryptocurrency data portal, recorded 63 billion trades on the day before the halving, the fourth-most active period of the year, as dormant (and new) investors stirred into action.