The BTC/USD pair is a crypto-fiat currency pair with bitcoin as the base currency and the United States’ dollar as the counter currency. Bitcoin is represented by the ticker BTC, while the US dollar is denoted by USD. The USD is one of the world’s major currencies, backed by the US government, while Bitcoin is the world’s most famous cryptocurrency. The BTC/USD pair represents the value of Bitcoin compared to the US dollar.
Bitcoin’s history begins with the release of the so-called ‘whitepaper’ in 2008 by Satoshi Nakamoto, a still unknown person or group of persons. It details a peer-to-peer electronic payment system.
The following year, in January 2009, Bitcoin was released. Bitcoin is a digital payment system, it is the first decentralised digital payment system in the world. It works using blockchain technology, in which each new block – or piece of info – is created to signify a transaction. The system makes it possible to make transactions directly, without a middleman, hence the term ‘peer-to-peer’.
In May 2010, the cryptocurrency found its first real world use – paying for pizza! The first pizza bought with Bitcoin was sold for 10,000BTC or at the time approximate $25. This price was soon to rise, by the following year in February Bitcoin’s price was equal to 1BTC to $1.
2013 saw Bitcoin’s first price spike during which it rose from $250 in April, to $1200 in November. That same month it was reported that Bitcoin moved more money internationally, than payment giant Western Union.
Despite security challenges, such as exchange hacks, the price and popularity of Bitcoin continued to climb reaching almost $20,000 in 2017, before taking a dive the following year to around the $8,000 – $9,000 mark (April 2018).
One of the world’s most influential currencies, the US dollar dates its history back to Joachimstal, now modern-day Germany. In the town, silver ‘thalers’ were minted, each with a standardised weight – 29.2 g. These coins were widely used across the European continent and eventually found its way to the New World – America.
Following the American Revolution, in 1972 the newly formed US Congress instated the ‘thaler’ as the official currency, although at a slightly lighter weight – 27.0 g. This was done as a method of standardisation, following the corrupt ‘continental bill’ system.
Although still closely tied to the price of silver and gold, the US dollar has developed as a currency spawning a multitude of coins and notes. Today, the currency is controlled by the Federal Reserve, the central bank of the United States, established in 1913.
The USD is the world’s foremost reserve currency, held by numerous countries as part of their foreign exchange reserves. It also makes up six out of eight of the world’s Forex pairs. The US dollar is denoted by the symbol $.
The BTC/USD pair is influenced by a number of factors, including news about either of the currencies. Scandals such as the Mt. Gox hack in 2014, which resulted in an approximately $473 million loss, continue to affect the price of the cryptocurrency. New regulations, being developed across the world, will have an impact into the future of the cryptocurrency. Whilst new regulations bring tighter control they also offer more security and legitimacy for traders.
Meanwhile, the USD is directly affected by US financial and political policy, news and events. An unstable political climate could lead to a decline in the value of the dollar. For those interested in this pair, keep a close watch of releases from the US Federal Reserve (Fed) especially regarding interest rates and monetary policy.
Outsider factors such as institutional investors, those who process large volume transactions, and an increased interest from Asia are also set to impact Bitcoin’s prices and influence this currency pair.
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