Bitcoin is the best performing asset of the last decade with an annualized rate of return of over 200%. But it hasn’t all been unicorns and rainbows. Bitcoin’s unprecedented ascent – from less than a penny to $69,000 – has been marked by numerous price corrections along the way.
As of this writing, Bitcoin’s price is down more than 50% from its all-time high of $69,000 achieved in November 2021. Many retail investors are now feeling more anxious than the Twitter executive team after Elon Musk’s purchase of the company.
But Bitcoin “HODLers” will argue that much of Bitcoin’s recent price action is due to broader macro-economic trends – like inflation and rising interest rates – which have battered the stock market as well. In addition, Bitcoin has gone through far worse corrections than the current one and has always recovered.
So is Bitcoin crashing for good or is this correction temporary? Here’s what you need to know.
The History of Bitcoin’s Crashes
Bitcoin’s history is filled with volatility. Bitcoin’s first crash was in 2011 and it was its biggest one ever. At that time, Bitcoin was in its infancy and an exchange named Mt. Gox was the main platform selling the cryptocurrency. On a single day, June 19, 2011, Bitcoin’s price plummeted 99%, hitting a low of one penny, after Mt. Gox revealed that criminals hacked into the exchange and stole users’ bitcoins.
In April 2013, Bitcoin suffered from another significant correction when the cryptocurrency tumbled over 80% from $266 to $50. Still, Bitcoin largely remained under the radar for most people until 2017. In that year, Bitcoin rose from $900 to nearly $20,000 only to fall 80% – around $3,350 – by December 2018.
Will Bitcoin Recover This Time?
Throughout every crash, you can find countless articles by corporate legacy press declaring Bitcoin a “Ponzi scheme” and valueless. However, Bitcoin has proven to be the most resilient asset of all time. Throughout its existence, Bitcoin has rebounded from every downturn while expanding its user base to nearly one hundred million individuals in less than a decade. With retail and institutional adoption only increasing by the year, there is every reason to believe Bitcoin will once again rise and set new all-time highs in the future.
