Price Moves Price
Arguably, one thing moves the price of bitcoin more than anything else: the price of bitcoin itself. Any time bitcoin’s exchange rate hits these new milestone highs, (mainstream) media takes notice, in turn attracting more attention to bitcoin and drawing in more new users. This, of course, pushes up the price even further.
And the past year has seen a lot of milestones.
While it wasn’t the first time ever that bitcoin traded over $1,000 — it had already happened briefly in late 2013 — the new $1,000 milestone was reached on the first days of 2017. The fact that this happened almost precisely at the same time the new year took off certainly helped write catchy headlines and juicy stories: Would 2017 be the year of Bitcoin?
Then, in March, a completely new milestone was reached: BTC for the first time hitparity with an ounce of gold. This is, of course, a rather arbitrary milestone: an ounce of gold is not 1/21,000,000 of all gold, while a bitcoin is 1/21,000,000 of all bitcoin. Yet, in 2013, it seemed to be a point of resistance for the markets: the bull run of the second half of that year peaked just before “gold parity” was reached. And of course, the symbolism was obvious: “Gold 2.0” overtook its physical predecessor.
One month later, bitcoin for the first time in well over three years reached another all-time high. The November record of $1,277 on MtGox — which was probably artificially high due, in part, to market manipulation — was breached across exchanges on April 26 of this year. Bitcoin was back after a long “winter sleep,” and of course the media took notice.
Needless to say at this point, bitcoin kept breaking records throughout the rest of the year. The bitcoin markets hit$2,000 for the first time ever in May, followed by$3,000 in June and up to$4,000 in August, making headlines each time — after which the price retracted a bit toward the end of the summer.
By late September, “FOMO” (Fear of Missing Out) really kicked in. With bitcoin surging over$4,000 once again, then$5,000,$6,000,$7,000,$8,000 and$9,000 on an almost weekly basis, the media piled on for each step, fuelling the momentum even more.