A short history of Cryptocurrencies

The bitcoin

Over the years, there had been some early research by many research laboratories about a cryptographic currency. In 1998, there were two publications about simple cryptocurrencies, the b-money, and the bit gold. Both of these were only concepts; they were never fully developed.

However, it all started with the introduction of Bitcoin in 2009! Bitcoin itself is based on a paper from 2008 by Satoshi Nakamoto. It is interesting to note that nobody knows who that person is. Nobody ever claimed its identity. We do not even know whether it is a person or a group of people. The paper established the base system of bitcoin in practical ways. One year later, the software is available publicly. And the first miners are starting their work and generating new cryptocurrencies. The first transactions were recorded.

Originally, it was not possible to trade bitcoins against other currencies or goods. Therefore, it had no monetary value. Early on, someone paid for two pizzas with ten thousand bitcoins. But I hope the pizza shop kept them. That is still worth about 100 million dollars today! Around 2010, bitcoin started to trade at around one bitcoin for 0.003 dollars.

If you are interested in the technical details, you can read our article on how cryptocurrencies work.

Bitcoin rise and alternative currencies

In April 2011, the price of bitcoin was the same as the dollar price. This price represents a 300 times increase in around one year. This quick rise started bringing in some investors. And it also started bringing in a lot of competitors. Other cryptocurrencies are often referred to as altcoins (alternative coins). The first important ones to emerge are Namecoin, Swiftcoin, and Litecoin.

Some of these alternative coins are bringing real improvements to the technology. For instance, some of them are faster. Or some of them are more secure. But many of them are just here to try to make some money. Since that point, there has been a lot of speculation about Bitcoin and altcoins.

Some websites have already started to accept bitcoins or other cryptocurrencies as payment methods. And big exchanges for trading were beginning to rise. There are also some stories about cryptocurrencies being used on the dark web. The authority has seized many crypto coins after several takedowns.

First bitcoin crash (2013)

2013 was starting well for the bitcoin. There were several millions of dollars of transactions of cryptocurrencies.

In November 2013, the bitcoin price rose to 1200 USD for the first time. Bitcoin did not reach this price again until 2017. After this, there have been many issues with bitcoin. Its price moved up and down with a lot of volatility. For instance, there was one big issue where two different versions of the blockchain existed in parallel for hours. In theory, such a situation should never happen, of course. This situation (called a fork) was caused by a software bug. There was also a problem where the biggest exchange did not have enough processing capacity. This issue delayed transactions and caused a significant dip in price.

One of the most significant events is the Mt. Gox breach. We do not know what happened, but all the users of the exchange website lost their bitcoins. That is almost a million bitcoin that were lost. The exchange filed for bankruptcy shortly after this.

In 2013, Thailand banned bitcoins. In 2014, China forbade all Chinese banks to use bitcoins. Moreover, in China, exchanging cryptocurrencies for real goods has been illegal since 2009. This made the price of bitcoin fall significantly. The Bitcoin price has been falling before this point. But from this point, its price had almost continuously fallen until 2015.

The new rise of 2016

In 2016, cryptocurrencies got a new rise in popularity.

This time, it was not only about Bitcoin but also about Ethereum. They took the concept further than Bitcoin. You can run secure decentralized applications on the Ethereum network. Ethereum is even a complete programming language. But it was also the start of Initial Coin Offerings (ICOs). These are fundraising systems where you can get coins of cryptocurrencies that do not yet exist. Some coins are pre-mined from the cryptocurrencies and offered to early investors. There has been a lot of them over the years. Many were simply scams to get money without any real value behind the new cryptocurrency. China directly banned ICOs.

There has also been a considerable increase in computing power in the bitcoin network. In 2016, there were 10 to the power of 18 (10^18) hashes per second done in the network by miners. That is one followed by 18 zeroes! It also increased the academic interest in cryptocurrencies. In 2016, there were beyond three thousand papers mentioning bitcoins. Although there was enormous computing power, the delay for transactions and the fees continued to rise.

Bitcoin becoming mainstream (2017)

2017 was the big year for the rise of cryptocurrencies. There were many events to drive that price increase.

For instance, Japan and Russia legalized cryptocurrencies. There was also a considerable increase in trading in bitcoins. It was mostly the case because many people (including me) were trying to get into the big profits that cryptocurrencies had shown (FOMO!).

It is also important to note that more and more websites and services have started accepting bitcoin. For instance, you could buy games on Steam with bitcoin. Even in Switzerland, the train company was beginning to accept bitcoins.

The price of bitcoin started to soar. In March 2017, it went above its previous high of November 2013. It already went to 3000 dollars in June. In August, it passed 4000 dollars. IT started to make a lot of noise in the media. And many people started investing in it, even having no idea what the cryptocurrency was about. September saw 5000 dollars, and already October saw 6000 dollars. In November, it reached 8000 dollars, and it reached 19000 dollars in December already. That is a 100% increase in a month.

The first burst of the crypto-bubble (2018)

But of course, the bubble had to burst. The December 22nd day saw the bitcoin lose one-third of its value in one day. It started to rise again, but January 2018 and February were not good months for cryptocurrencies. Bitcoin lost another half of its value in two weeks. Its value did not recover for a while.

I talk here, especially about bitcoin but other cryptocurrencies also followed the same bubble pattern. Ethereum lost 75% of its value. Litecoin saw its value divided by six. The entire capitalization of all the cryptocurrencies saw a decline of 75% between December 2017 and August 2018!

The second bubble (2021)

It took three years for bitcoin to reach its previous high again. After this point, it reached a new all-time high very quickly. It went from 19K to more than 62K in five months. This is an impressive climb.

It stayed near the top for a few months and then lost 50% of its value in about two months. This time, the crash was primarily due to some bad institutional news.

For instance, Elon Musk has announced that Tesla would stop accepting Bitcoin as a payment for his cars. One of the reasons cited was the terrible environmental impact of Bitcoin.

The fall rally of 2021

Shortly after the second crash, bitcoin started a new climb. From the lows of July 2021, it more than doubled its value in four months until it reached 67K USD in November 2021.

Many people say that 2021 is the year of crypto. It made more news than ever, and many people started talking about crypto and investing.

After this, it started a free fall towards losing half of its value quickly. This was primarily due to some concerns over the Omicron variant that was beginning to take the world by surprise. By December 2022, a Bitcoin had lost 75% of its value.

A new rise (2022-2024)

After having lost so much of its value, Bitcoin started gaining once again. This growth was fueled by many factors:

• A lot of anticipation towards the first Spot Bitcoin ETF approval in the United States (approved in January 2024)
• Loss of confidence in the banking system (Credit Suisse failure, for instance)
• High inflation of standard currency in many countries
• Anticipation of the Bitcoin halving

It is interesting to note that several of these events are generally bad events for the stock market, but they were good events for cryptocurrencies since they represent an alternative investment.

After this quick rise, the Bitcoin started a small fall. From May 2024 to September 2024, it lost about 28% of its value again.

A meteoric rise (2024-2025)

After the small fall, Bitcoin started a new gigantic rise, starting in September 2024. This is insane growth. We are talking about doubling the value of Bitcoin in less than 5 months. If we compare to the stock market, this is an extremely rare event, only happening with a few single stocks.

Again, this surge was fueled by multiple factors:

• The US Federal Reserve cut interest rates, making people move to riskier assets.
• Trump announced a strategic reserve in Bitcoin. Investors took this as a sign of US support for Bitcoin.
• We also saw several massive institutional investments in cryptocurrencies, marking a shift in who is investing.

Again, these are quite interesting factors, that are quite different from the factors working in the stock market.

After this rise, we saw a quick drop again, as usual. This was mostly the same factors that made the stock market drop at this time. The trade tensions also influenced the stock market. And since Bitcoin was at an all-time high, many people also cashed out and drove the price down.

Present (2025)

Since the drop, the market has started to recover again (quickly). From April 2025 to May 2025, the market gained more than 40%.

We will see how it goes from there, but once thing seems sure: Bitcoin is not going anywhere. When it started, I would not have though that it would last so long. It turns out I was wrong—Bitcoin increasingly appears to be a viable, though highly risky, alternative investment.

Other bits of history

This article only tells a small part of the history of cryptocurrencies. I mainly focused on Bitcoin and Ethereum in this article. However, there have been thousands of cryptocurrencies since the beginning of the blockchain.

Some of these coins did well, but most of them failed. And many of them were massive scams. It is important to mention that many of the coins were Ponzi schemes. Other coins were memes from the beginning. Several coins were hacked, and their value tanked massively.

It is essential to know that the history of cryptocurrencies is full of fraud. If you decide to invest in crypto, you need to do your research, and you should avoid falling into complete FOMO for coins that promise 20% returns guaranteed. Even in the crypto world, there is no such thing.

In December 2022, FTX filed for bankruptcy. It turned out they were mismanaging their customer assets. At their peak, they were managing well over 16 billion of customer assets. According to the bankruptcy filings, there was a huge discrepancy (in billions) between owed and owned assets.

One positive news worth mentioning is that in September 2022, Ethereum switched from using a Proof-Of-Work validation technique to using a Proof-Of-Stake validation technique. This is worth mentioning because this reduced the power consumption of Ethereum by more than 99%!

In November 2023, the then-CEO of Binance Changpeng Zhao pleaded guilty to violating anti-money-laundering laws. He then stepped down as CEO. Binance itself settled to pay more than four billions in penalties to resolve several investigations.

Conclusion

Even though cryptocurrencies are still relatively young, they already have a rich history. I find it very fascinating. Countless things happened. Entirely new technology was developed. New cryptocurrencies were created. Coins were stolen, and exchange networks got shut down or went bankrupt.

Some countries made it illegal, while others have been very enthusiastic about it. Some cryptocurrencies saw a rise of several thousand times their values in a short period. And the entire cryptocurrency market lost 75% of its value in one month.

Nobody knows what will be the future of cryptocurrencies. I think the technology itself has a lot of value. Blockchain ledgers can be used in many applications, from banking to administration.

I do not know what will happen in the future for cryptocurrencies. But I think that it is a great story. The technology is powerful. I believe that the technology behind cryptocurrencies will last. And it will see new usages.

In 2025, I have started investing a little again in cryptocurrencies through Swissborg, a Swiss cryptocurrency platform. However, it is critical to know that investing in crypto is very risky and is not for everybody. Furthermore, there are many issues with investing in crypto. Investors should be aware of these issues before choosing to invest in cryptocurrencies.

What do you think about cryptocurrencies? What do you think will happen to them in the future?