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In May 2010, Laszlo Hanyecz, an early cryptocurrency enthusiast, used Bitcoin to buy two pizzas from Papa John\u2019s. He spent 10,000 Bitcoins, or roughly $40 at the time, in one of the first purchases ever made with the digital currency.<\/p>\n
It has turned out to be the most expensive dinner in history.<\/p>\n
On Wednesday, the price of a single Bitcoin rose to more than $100,000, a remarkable milestone for an experimental financial asset that had once been mocked as a sideshow and a fad. The total cost of those pizzas today: $1 billion.<\/p>\n
Bitcoin now stands as arguably the most successful investment product of the past 20 years. The value of all the coins in circulation is $2 trillion, more than the combined worth of Mastercard, Walmart and JPMorgan Chase. The motley assortment of hackers and political radicals who embraced Bitcoin when it was created by an anonymous coder in 2008 have become millionaires many times over. And the invention has spawned an entire industry anchored by publicly traded companies such as Coinbase, a cryptocurrency exchange, and promoted by celebrities, athletes and Elon Musk.<\/p>\n
Even the president-elect says he is a believer. During the campaign, Donald Trump marketed himself as a Bitcoin enthusiast, vowing to create a federal stockpile that could push its price even higher.<\/p>\n
Bitcoin began as \u201cessentially an experimental hobbyist project,\u201d said Finn Brunton, author of a 2019 book about the history of cryptocurrency. \u201cTo see where it is now is to see a really impressive feat.\u201d<\/p>\n
Bitcoin\u2019s rise to $100,000 signals its now-undeniable status in the global economic system. The virtual currency has become a staple of financial markets, embraced by Wall Street giants and amateur investors alike. Its surge also caps an astonishing turnaround after its price dropped below $17,000 in 2022, as the collapse of the FTX crypto exchange sent the industry into a tailspin.<\/p>\n
This year, Bitcoin has come roaring back. Federal regulators allowed Wall Street firms to offer a popular financial product tied to the coin, attracting billions of dollars in fresh investment. Then, Trump\u2019s election victory sent its price even higher, as crypto enthusiasts branded him the first \u201cBitcoin president.\u201d<\/p>\n
Last month, Gary Gensler, chair of the Securities and Exchange Commission and a crypto critic who had led a crackdown on the industry, said he would step down Jan. 20.<\/p>\n
Earlier Wednesday, Trump picked Paul Atkins, a former regulator and founder of a financial consulting firm, as the next SEC leader. He has advised clients on crypto issues, and is seen as a strong advocate for looser regulation of the digital asset industry.<\/p>\n
In a matter of months, Bitcoin investors went from bemoaning tough regulation under the Biden administration to shopping for Lamborghinis and gloating on social media. Top crypto executives spent about $135 million to influence the US election, and they are now enjoying the spoils.<\/p>\n
\u201cThere\u2019s an enormous amount of excitement in the industry right now,\u201d said Jeremy Allaire, the CEO of Circle, an influential US crypto company. \u201cA lot of positive energy.\u201d<\/p>\n
Still, Bitcoin remains prone to extreme volatility. Its price sometimes drops when the global economy struggles. Environmental groups have raised concerns that the energy required to run Bitcoin\u2019s software contributes to climate change, and the technology has long been used by scammers and thieves.<\/p>\n
While some of that illicit activity has fallen off, cybercriminals used digital currencies to facilitate about $500 million in ransom payments over the first six months of the year, according to crypto forensics firm Chainalysis.<\/p>\n
Before it became a cultural and financial phenomenon, Bitcoin was just an idea sketched out in a nine-page white paper posted on an internet mailing list on Halloween in 2008. The author was a mysterious coder who used the pseudonym Satoshi Nakamoto. At its most basic, Satoshi\u2019s vision was a type of digital money that people could exchange without relying on banks to process the transfers. Every transaction would be recorded on a publicly visible ledger known as a blockchain.<\/p>\n
Early enthusiasts envisioned Bitcoin as the foundation for a new kind of financial system that would be governed by code and exist outside the supervision of Wall Street firms and government regulators. They also viewed Bitcoin as a long-term store of value \u2013 it was programmed to have a fixed supply, so it would be resistant to inflation.<\/p>\n
The Wall Street establishment dismissed Bitcoin as a passing trend and a tool for criminals. Jamie Dimon, CEO of JPMorgan Chase, called Bitcoin \u201ca fraud\u201d and a \u201cPonzi scheme.\u201d Trump once decried it as \u201ca scam\u201d designed to undermine the US dollar.<\/p>\n
But believers thought Bitcoin might someday facilitate real-world transactions. On May 18, 2010, Hanyecz posted in a popular Bitcoin forum, offering to send 10,000 Bitcoins to anyone who ordered him pizza from Papa John\u2019s. \u201cLike maybe 2 large ones so I have some left over for the next day,\u201d he wrote.<\/p>\n
A deal was struck, and the event became known as Bitcoin Pizza Day. Over the next decade, Bitcoin inspired thousands of other digital currencies with names like Ether, Solana and Dogecoin, some of which also became enormously valuable.<\/p>\n
In November 2021, Bitcoin\u2019s price soared to nearly $70,000, setting a record. The crypto world was ascendant. Kim Kardashian encouraged her Instagram followers to buy the coins, and athletes like Tom Brady and Steph Curry promoted crypto companies in splashy television commercials.<\/p>\n
Then the bubble burst. In 2022, FTX and other prominent crypto firms filed for bankruptcy, causing the prices of Bitcoin and other digital assets to plummet by as much as 96%. Amateur investors who had poured money into crypto saw their savings vanish. In Washington, Gensler of the SEC embarked on a wide-ranging clampdown.<\/p>\n
But the industry\u2019s fortunes changed again this year, after the SEC lost a court battle to block a new financial product tied to Bitcoin. In January, major Wall Street firms, including BlackRock, Franklin Templeton and Fidelity, started offering exchange-traded funds linked to Bitcoin, attracting a wave of investment. Bitcoin\u2019s price skyrocketed to another record in March.<\/p>\n
Wealthy investors who had held onto their Bitcoin became even richer. Michael Saylor, CEO of software firm MicroStrategy, had been widely mocked for borrowing hundreds of millions of dollars to buy Bitcoin for his company. Now his stash is worth more than $30 billion.<\/p>\n
On the campaign trail, Trump proclaimed himself pro-Bitcoin, promising to fire Gensler and end the SEC\u2019s crackdown. A few weeks before the election, Trump and his sons started their own crypto business, World Liberty Financial.<\/p>\n
Suddenly, a financial asset designed to circumvent the US government was surging in value because a US presidential candidate had embraced it.<\/p>\n
Bitcoin has risen in \u201cexactly the opposite way that it was intended,\u201d said Brunton, the crypto author. \u201cBy being something where its real value comes from its association with a politician and a state actor.\u201d<\/p>\n
This article originally appeared in The New York Times<\/a>.<\/p>\n<\/p><\/div>\n