History of Crypto: Ethereum’s entry and Bitcoin’s expansion

As Bitcoin continued its early stages of development, the largest exchange at the time was on its way to ruin.

Welcome to History of Crypto, a Cointelegraph series that brings readers back to the most significant events in the crypto space. Powered by Phemex, the timeline allows crypto community members to explore and look back at the important events that shaped the industry into what it is today.

This article explores the pivotal period from 2013 to 2015 in the cryptocurrency world — a time of significant advancements and notable challenges. During this period, the increasing mainstream adoption of Bitcoin (BTC) marked a critical shift toward recognizing digital currencies. However, this era also witnessed the dramatic fall of Mt. Gox, underscoring the risks and volatility in the burgeoning crypto market.

This epoch also saw the emergence of the first memecoin and the first nonfungible token (NFT), innovations that expanded the crypto landscape’s creativity and functionality. 

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Most importantly, this is the time period when the Ethereum network was conceived. This groundbreaking development promised to leverage blockchain technology for more than just currency, paving the way for smart contracts and decentralized applications (DApps). This period was crucial in shaping the trajectory of the cryptocurrency movement, setting the foundation for future innovations and challenges.

Bitcoin continues its expansion

Shortly after the first Bitcoin halving in 2012, BTC reached a notable milestone a few months later. On March 28, 2013, the price of Bitcoin climbed, beginning to trade at around $92. This price increase led its market capitalization to hit the $1 billion mark for the first time, marking a significant moment in the cryptocurrency’s history.

In an event that sparked widespread attention, Bitcoin achieved a remarkable milestone by reaching a new all-time high of $190 on April 10, 2013, during the Cyprus banking crisis. This crisis highlighted the potential benefits of decentralized currencies, leading many to view Bitcoin as a viable alternative to the traditional financial system’s vulnerabilities. Despite the initial surge, Bitcoin’s value experienced a significant drop to $68 just a week after reaching its peak.

Later in the year, Bitcoin continued to captivate market observers by surpassing expectations and reaching $1,000 on Nov. 19, first on the BTC China exchange (now known as BTCC) and subsequently on Mt. Gox. This achievement underscored Bitcoin’s growing relevance and the increasing interest in its role as an alternative asset within the broader financial landscape.

An old titan falls, new exchanges start to rise

During this critical period, Mt. Gox, the largest crypto exchange at the time, faced significant challenges. On June 20, 2013, it announced a temporary halt of U.S. dollar withdrawals, setting off two weeks of uncertainty. Although withdrawals eventually resumed, the exchange encountered difficulties processing them efficiently, underscoring the operational hurdles it grappled with.

In a significant development within the cryptocurrency community, Mt. Gox announced the suspension of U.S. dollar withdrawals, followed by a stop to Bitcoin withdrawals on Feb. 7, 2014. This series of events culminated in the suspension of trading on Feb. 24, 2014, and a bankruptcy filing in Tokyo shortly after.

The situation escalated when Mt. Gox sought bankruptcy protection in the United States in March 2014, revealing that 750,000 BTC belonging to its customers and 100,000 of its own coins had been compromised, amounting to a loss valued at around $473 million at that time.

While the downfall of Mt. Gox marked a turbulent period in the cryptocurrency sector, it coincided with the emergence of several platforms that would become major players in the future. Okcoin, which would later rebrand to OKX, launched its operations on June 1, 2013. Close on its heels, Kraken’s trading platform became operational on Sept. 10, 2013. 

In the meantime, Coinbase, established in 2012, secured a $25 million Series B funding round in December 2013, led by venture capital firm Andreessen Horowitz, showcasing the growth and resilience of new entrants in the cryptocurrency exchange landscape during a period of upheaval.

Ethereum’s arrival

In 2013, Vitalik Buterin introduced the Ethereum network through a white paper, positioning it as a versatile platform for developing DApps. Buterin outlined how blockchain technology could serve purposes beyond just monetary transactions.

In January 2014, Ethereum co-founders Gavin Wood, Charles Hoskinson and Anthony Di Iorio unveiled Ethereum at the North American Bitcoin Conference in Miami with Buterin.

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These exchanges now offer users access to a broad array of cryptocurrencies, with Ethereum’s native coin, Ether (ETH), securing its position as the second-largest digital asset by market capitalization. Ethereum has fulfilled its promise by evolving into a central platform for DApps.

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The next piece in Cointelegraph’s History of Crypto series will delve into the initial coin offering boom and the ongoing evolution of Ethereum. Be sure to follow Cointelegraph for insightful updates on the most pivotal developments in crypto history.