From Brexit to Bitfinex: What Shaped Bitcoin's Price in 2016

Bitcoin prices surged more than 80% in 2016, pushed higher by developments such as the Brexit, the halving and the Bitfinex hack.

AccessTimeIconDec 20, 2016 at 5:06 p.m. UTC
Updated Sep 11, 2021 at 12:45 p.m. UTC

For the price of bitcoin, 2016 might have been one for the books.

Bitcoin prices surged more than 80% over the course of the year, with these gains resulting from a handful of sharp price fluctuations combined with a general, upward trend. Bitcoin prices have risen from roughly $430 at the beginning of the year to around $790 at press time.

These price gyrations took place as markets and those trading within them responded to a series of major global developments, including the decision by UK voters to exit the European Union, the hack of bitcoin exchange Bitfinex, and the halving of bitcoin’s mining reward, which reduced the number of new bitcoins produced in each transaction block from 25 BTC to 12.5 BTC.

While bitcoin prices rose steadily in the months leading up to the halving, markets experienced more abrupt changes in response to Brexit and the Bitfinex hack.

As a result, the cryptocurrency's 30-day BTC/USD volatility fluctuated quite a bit in 2016, falling below 1% in both April and October and then surging above 5% in July, according to data from The Bitcoin Volatility Index.

The Brexit

It was the vote that stunned Europe.

As reported at the time, 52% of UK voters opted to leave the European Union, an outcome that shocked pollsters and set the economic bloc on an uncertain path ahead.

Bitcoin's price surged leading up to the Brexit vote, climbing roughly 47% between 1st and 18th June, CoinDesk USD Bitcoin Price Index (BPI) figures show. Momentum drove the digital currency's price, pushing it above $780 to a 28-month high on 18th June.


However, bitcoin prices went on to lose some of these gains, plunging more than 10% on 21st June after a poll conducted by market research firm Survation showed 45% of voters wanted the UK to remain in the EU, compared to 42% who wanted to stick with the economic bloc.

Bitcoin prices extended these losses on 23rd June, falling 15% to $551 early in the session as sources pointed to greater odds that the UK would stay in the EU. Against the predictions of many, the Brexit effort prevailed, and bitcoin prices opened 24th June at $625.49.

Several analysts, including Joe Lee, founder of leveraged bitcoin trading platform Magnr, emphasized bitcoin’s role as a safe-haven asset to explain the significant volatility the cryptocurrency experienced before and after the Brexit referendum.

“Bitcoin is an uncorrelated asset class and a valuable hedging mechanism," Lee told CoinDesk. "In an investor portfolio where there is macroeconomic uncertainty fueled by local politics, diversifying outside of the geographical boundary becomes imperative."

The halving

The halving, on the other hand, was a more muted affair.

Bitcoin's underlying code includes several scheduled reward reductions, causing the amount of new bitcoins produced with each block to decline over time. The halving on 9th July was preceded by speculation that the event would drive the price of bitcoin to new heights.


The digital currency's price fluctuated in early July, rising to as much as $704.42 on the 3rd of that month and then closing at $664.74 on the 8th, the day before the halving.

Once this much-anticipated event took place, bitcoin prices traded largely within a reasonably tight range between $625 and $675, additional BPI figures show.

Petar Zivkovski, COO for leveraged bitcoin trading platform Whaleclub, commented on how this event affected market participants.

“Yes, the halving was probably the most impactful event this year. In the months leading up to the halving, price surged as traders and new money anticipated a decrease in supply production," he said. "The mere idea of more scarcity was enough to pump price to newer highs.”

However, not everyone seemed as convinced about the impact that the halving had on traders.

Arthur Hayes, co-founder and CEO of leveraged trading platform BitMEX, seemed a bit skeptical about the event’s importance.

“Prices roughly doubled from January to July when the halving occurred," he told CoinDesk.

Bitcoin prices did enjoy some notable gains during the first half of 2016, rising upwards of 20% in February and May and surging 26.5% in June, BPI figures reveal. These monthly increases contributed to the cryptocurrency spiking more than 56% gain during the first six months of the year, causing bitcoin to rise from roughly $430 to $672.48 in that time.

Hayes commented on this relative calm, telling CoinDesk:

"After the event, the price remained stable and barely moved."

Bitfinex hack

No 2016 report on bitcoin’s price developments would be complete without covering the 2nd August hack of Bitfinex, which resulted in the loss of nearly 120,000 BTC.

In the wake of the hack, the exchange temporarily stopped trading after the security breach was confirmed. Bitcoin prices cratered in response, declining roughly 20% during the session from $607.37 to $480.


Over the next few days, the digital currency recovered, reaching $580 on 4th August.

Markets observers were split on the long-term impact of the Bitfinex hack, arguably the most impactful of 2016.

“The hack killed the positive momentum building in bitcoin,” said Hayes. “It renewed doubts as to the viability of startups handling vast sums of client money. It also made many newcomers think twice before sending fiat or bitcoin to any exchange.

He went on to say:

"Although the price recovered and surpassed its levels pre-hack, I believe current trading volumes would be higher if Bitfinex had not been hacked."

However, others downplayed the importance of the incident.

“The Bitfinex hack was a pseudo-event in that it managed to shake out weak hands while smart money swooped in to take advantage of the fear and uncertainty,” said Zivkovski.

Bitfinex is a “small player,” he went on to assert, adding that this event was “very unlikely to change the course of bitcoin's underlying value”.

The Trump effect

After the dust of the Bitfinex hack settled, bitcoin prices enjoyed a steady, upward climb, rising from roughly $580 in early August to linger near $790 at the time of report, representing a 36% increase overall.

During that time, controversial business tycoon Donald Trump won the 8th November presidential election, defeating former US Secretary of State Hillary Clinton.


The price had experienced swings in the days leading up to the US vote. The price had gone as high as $744.28 on 3rd November, according to BPI data, only to tumble below the $680 mark later that day.

In the aftermath of the win, bitcoin prices popped amid a broad decline in stock markets worldwide. Bitcoin prices rose more than 4% on 9th November, climbing from $709 to as much as roughly $739. While Trump’s victory was a shock to some, the resulting bitcoin price rally was not surprising to some observers.

Following this event, the price of bitcoin fell back before continuing its slow, upward trajectory, leading them to the price of roughly $790 at press time.

Image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.