The table below shows the 'Return On Investment' of bitcoin. The percentages indicate the return on an investment in bitcoin, measured from three different moments in time.

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Below are the most important measures of the bitcoin price over the past six years: the highest and lowest price of each year.

Will bitcoin stabilise?

The price of bitcoin is characterised by substantial fluctuations. This is called volatility. A frequently asked question is why the price is so volatile. To understand this, it helps to compare the total market cap of cryptocurrencies with other financial markets.
The total market value of bitcoin is approximately 60 billion dollars. The market value of the entire crypto market is roughly 120 billion dollars. While this may seem a huge amount of capital, it is actually a mere splash in the ocean. In comparison, the total market value of Apple, a single company, is five times as much: more than 600 billion dollars.

So the cryptocurrency market is still rather small. As a result, relatively small amounts of money can cause some rather serious price movements.

If you compare the cryptomarket to the entire stock market it sort of looks like the image below. The green blocks represent the crypto market, the blue blocks represent the entire stock market.

What to expect from the bitcoin price?

The person that can predict future price movements of bitcoin would be a very wealthy individual indeed- if only we had a crystal ball! We’re often asked to give some sort of prediction of what the price per bitcoin will be by a certain date in the near future. The honest truth is that we have no idea either. We’re very optimistic about the long term, that’s for sure, but to say what the price will be in three months it’s hard to predict.

What could be helpful is the ROI table you will find at the top of this page. ROI stands for Return On Investment, this indicates if the bitcoins you’ve bought gained or lost value and with which percentage. The table compares the current situation with that of one year ago, three years ago, and five years ago.

We can also say however, is that the price of bitcoin depends on multiple factors.
In the short term, media reports can be of great influence. If Twitter’s CEO were to state that he expects bitcoin to be the currency of the internet, it’s an opinion that will likely dramatically improve bitcoin’s sentiment and consequently push up the price.

On the other hand, rumours of regulation by the government can cause the price to drop. This isn’t necessary at all, since regulation can contribute to the acceptance of bitcoin. For example, regulation can inspire large investors to enter the market and encourage stores to accept bitcoin as a payment method.

However, the most important thing is that the bitcoin ecosystem keeps evolving and that it has a strong foundation. Luckily, that seems to be the case. The amount of people that use bitcoin has increased enormously, just as the amount of daily transactions. The computing power of the bitcoin network has never been so high. Developers are working concurrently around the clock and software is always being vigorously tested and improved. These trends and improvements don’t seem so spectacular on the surface and in turn don’t necessarily get the media attention they deserve, however, they are certainly the ones that matter.