The History of Bitcoin in One Chart (And it Says Nothing About Prices!)

Kevin Werbach
7 min readJun 12, 2018

(Originally published June 8, 2018 on LinkedIn)

An amazing chart from Morgan Stanley, cited by the Financial Times, sheds new light on the Bitcoin and cryptocurrency phenomenon. As is usually the case, good data and good stories are mutually reinforcing. The chart alone doesn’t tell us why things are happening, or even entirely what things are happening. Instead, it helps understand what events in the real world were significant. And offers evidence to support hypotheses, whether about the past or the future. Almost no piece of data from the chart is new, but seeing it laid out in one place is revealing.

Four Eras of Bitcoin

There have been four distinct eras in the relatively brief history of cryptocurrency. The early hobbyist days went from Bitcoin’s 2009 launch to the rise of two dominant platforms: the Mt. Gox exchange and the Silk Road dark marketplace. There was turmoil when both collapsed between late 2013 and early 2014. The price of Bitcoin plummeted from over $1000 to under $300, where it largely stayed for two years.

In 2014–2016, activity diversified away from Bitcoin, in two directions. First, Ethereum and other platforms generalized Bitcoin’s digital currency into a mechanism for decentralized applications and services. Second, enterprises and governments got excited about distributed ledger systems that added a permission layer to Bitcoin’s open network. These were the days of “blockchain, not Bitcoin.”

In 2017, the pendulum swung again, as the price of bitcoin and other cryptocurrencies suddenly took off. Initial coin offerings (ICOs) and cryptoasset trading were all the rage. The price of bitcoin briefly approached $20,000 in December 2017, bringing the total value of cryptocurrencies in circulation to roughly $750 billion. Millions of retail investors around the world piled in, hoping for massive gains. The Coinbase exchange’s mobile client was briefly the top download in the Apple App Store.

And then in early 2018, the market corrected. Bitcoin fell swiftly to roughly $8,000. Regulators such as the SEC started going after fraudulent and non-compliant ICOs, while China and South Korea banned them entirely. What’s surprising isn’t that the bitcoin bubble popped. Unlike 2013, it didn’t. It deflated in a relatively orderly way. The folk explanation is that cryptocurrency holders, convinced of the fundamental…



Kevin Werbach

Wharton prof, tech policy maven, digital connector, pesctarian, feminist. Co-author, For the Win; author, The Blockchain and the New Architecture of Trust.