2013 Bitcoin, from $13 to $1,000

In 2013 Bitcoin went from a programmers' experiment to an asset the public had heard of. That is why it unlocks in 2013 in the SHOBO investing simulation.

From white paper to experiment

Bitcoin began in autumn 2008 with a nine-page white paper by someone using the name Satoshi Nakamoto. The first block was mined in January 2009, and for years after that Bitcoin was mostly an experiment among cryptographers and programmers. In 2010 someone paid 10,000 BTC for two pizzas, which shows how little it was worth as money. Exchanges opened and it got a price, but most people had never heard of it.

2013: Cyprus and $1,000

The turn came in 2013. In March, Cyprus agreed to a bailout that made bank depositors take losses, the first time a eurozone country had done so. Bitcoin's pitch as "an asset outside the banks" suddenly sounded plausible. The price, about $13 in January, spiked and crashed in spring, then broke $1,000 in November: roughly 85 times in eleven months.

It crashed right after, and in early 2014 Mt. Gox, once the world's largest exchange, went bankrupt after a hack. That ended the first cycle, and many wrote Bitcoin off as a bubble. By then, though, the public knew it as an asset.

The QE backdrop

All this happened during quantitative easing. The Fed was buying tens of billions of dollars of bonds every month, and in May 2013 a mere hint that it would slow those purchases shook emerging markets (the "taper tantrum"). The money released after the financial crisis pushed up the price of almost every risk asset, from stocks to property to crypto, for nearly a decade.