Bitcoin: From $8 to $100 in 2013

From $8 to $100: The Bitcoin Rally Nobody Believed

Bitcoin went from being worth 15.33 dollars to 10.74 in three hours. It peine on August 17, 2012, and anyone with money in it remembers. A 30% drop in a single session, in a market that was then taken as a joke. Months later, the same coin crossed 100 dollars, and the rally stopped being an anecdote and became a problem. What came next—up to 60,000—turned that episode into a recurring joke: those who predicted the collapse, looking at today's chart, have never recovered.

From $15 to $8: The First Plunge Nobody Could Explain

When the price broke 8 dollars, the cumulative drop exceeded 50% in just a few days. The uncomfortable question—how to stabilize an asset with so few users—remained unanswered. Nor was the other one: how to get more users with such volatility.

The calculation then was based on probabilities. If the coin had, say, a 5% chance of success in the medium term and a 95% chance of disappearing, the expected value still made it worthwhile with a small bet. Unorthodox. Also very profitable for those who held on. Those who looked at the three-month chart and ran for the hills, on the other hand, missed the entire rally from the sidelines.

The 400,000 Bitcoins That Could Sink the Market

There was talk of an operator who controlled around 400,000 bitcoins, perhaps more than half a million. If they liquidated them all at once, they calculated, they would wipe out all the buy depth on MtGox and leave the price near one dollar. The detail is that they didn't liquidate them.

The alleged scheme suspended operations with the promise of returning the money. The doubt remained whether it was a typical fraud or something akin to an orderly bankruptcy. MtGox, for its part, would hardly have allowed the withdrawal of such a quantity at once. The move was as antiestéticared as it was improbable.

Was Bitcoin a Ponzi Scheme?

It doesn't promise interest, so it doesn't fit the classic definition. The counter-argument: it sells a limited-issue item whose value increase is implicit in the design itself, without needing to promise anything to anyone. The response to that: then any asset subject to supply and demand would be a Ponzi, and that's called speculation.

The nuance matters because it shapes all subsequent discussion. And the nuance is that nobody signs a paper promising to pay. Without a promissory note, there is no defined fraud, even if the outcome for the last one to enter is identical.

Cyprus, MtGox, and the Avalanche of New Accounts

In April 2013, with Cyprus in the spotlight, the platform had accumulated 5,500 pending account verification requests. 4,100 bitcoins were bought to break the $100 barrier. The price jumped to 102. At the same time, withdrawing money could take between two and three weeks, and trading commissions were around 0.6%.

The market was beginning to open up: the bulk of operations was no longer concentrated in a single book, and other markets were gaining share. The diversification of platforms and exchanges was seen as a sign of maturity. No one asked what would happen if one of those platforms disappeared with the money inside. There would be time.

Gold vs. Bitcoin: The Safe Haven Fight

The dispute with gold proponents was fierce. It was argued that the precious metal is not valuable for its industrial utility—it's not the best at anything—but for its historical role as money. And, against that, that a finite-issue digital currency would eventually displace it. The opposing thesis: gold is a material accounting of agreements, something that a bar found on the street doesn't reveal on its own.

At the heart of the dispute was the eternal question. Can something be a store of value without physical backing? The most sensible answer circulating didn't pick sides: diversify. Gold, silver, bitcoins, and some cash. The proportion, to the consumer's taste.

Ten Years of Comebacks: From $8 to $60,000

Time sorted things out. The coin that almost no one wanted at 8 dollars reached 12,000 and then 60,000. Those who predicted zero have gone silent. Those who entered late console themselves by calculating what they lost by not buying earlier, which in some cases was 1,400 dollars for not having bought sooner.

Some estimate the fair value of bitcoin at 15,000 euros and that of euros at nothing. That's an opinion, not a fact. What is a fact is that the asset survived a 50% crash and a decade of collapse predictions.

That doesn't make it immune to a fifth. Those who today laugh at the person who sold at $8 would do well to remember that the rally also ruined those who went short at 60. The next time, if it comes, no one will give advance warning.