Q1 2013 is practically ancient history for bitcoin, given its severe price movements this month, but it's worth a look back to see just how far the digital currency has come since the beginning of the year.

Just a few months ago, "bitcoin was a $100 million 'idea' with growing interest from a niche community," Coinsetter said in a blog post analyzing the first quarter:

"Over the past three months, the currency’s substantial growth and usefulness in tough economic situations has led to a visible shift in bitcoin’s position in the financial world, culminating in an aggregate valuation of $1 billion."

Bitcoin experienced a steady run up in price over the first quarter, with an average daily return of 4.2% over the period, Coinsetter notes. Prices ranged from a low of $13.16 early in the period to a high of $95.70.

"All in all, a bitcoin trader holding the currency from its low to its high over the period would have earned a lucrative 627% return," the Coinsetter blog states.

Trading volume also experienced growth, doubling from 156,889 bitcoins traded on Mt. Gox in January to 324,876 bitcoins traded in March.

In addition, the average trade size increased in Q1, rising from $151 in January to $378 in March:

"This is interesting because it demonstrates that traders are becoming comfortable with larger transactions, and it's likely that more experienced players are entering the market," Coinsetter points out.

Volatility also came into play in Q1, with eight days having price swings greater than 20% and 21 days with price swings larger than 10%. On a monthly basis, the price swing (monthly range as a percentage of minimum price) was 63% in January, 92% in February and 191% in March. The standard deviation of prices was 13% in January, 15% in February, and 31% in March.

"Needless to say, if your strategy benefits from volatility, you should be trading bitcoin," Coinsetter concludes.

Coinsetter predicts continued growth in Q2: "More companies are entering the bitcoin space and an increasing number of real world uses for bitcoin are appearing, so there are many reasons to be bullish in Q2 2013. In a world of multi-trillion dollar payments and banking industries, the idea of a $10 billion virtual currency is not that far away."