Bitcoin has had its ups and downs over the past decade. But, as any cryptocurrency trader could tell you, these crashes have been integral to Bitcoin’s history. They’re not just bumps in the road: they’re how Bitcoin grows and evolves. Here’s a brief look at how each crash shaped the market over time and why experts think we’ll see another big one in 2022. For more information on how to invest in crypto in the right way, just click on the link.
2009-2011 crash
Bitcoin was created in 2009 but didn’t start trading until 2010. At the time, Bitcoin was worth about $0.10. Still, bitcoin is a valuable investment. By 2015, it had risen to a value that rivalled gold’s and outpaced every major currency on earth—and then all hell broke loose.
The crash happened over three years: from December 2011 through May 2013; then again from November 2013 through April 2014; then again from November 2014 through February 2015, and finally back down to its pre-crash level in mid-2015 before rebounding once more by early 2016.
2011–2013
The first bull market in Bitcoin was started by a group of early adopters, who bought up large numbers of bitcoin at low prices and held onto them. In 2011, the price rose from $0.30 to $32 before falling back to around $2.
The second bull market began in 2013 when the price jumped from around $20 per coin to more than $266 within a few months. This was followed by another huge increase, after which it fluctuated between 260 and 300 dollars for several years until it finally stabilized at around 200 dollars per coin following the halving event in 2016 (a decrease from 50 coins per block).
2013–2015 first bear market
The first bear market was caused by Mt. Gox, a major bitcoin exchange that went bankrupt in 2014. It was the largest bitcoin exchange at the time and had handled over 80% of all transactions on the platform before it shut down for good.
In 2013, Bitcoin traded at around USD 1,200 per coin. However, by early 2014, it had fallen to below USD 200 per coin and stayed there until February 2015, when it recovered somewhat to trade at around USD 700 per coin again. Then things got worse. In March 2015, Bitcoin hit an all-time low of just under USD 100 before recovering slightly above this level as we entered 2016.
2015–2017 second bull market and crash
The price of bitcoin rose from $100 to $1,000 in the second bull market. In 2017, it reached an all-time high of $20,000 per coin and a market cap of over $300 billion.
The crash was swift and severe, less than two weeks after its peak value, Bitcoin fell below $6000 for the first time since 2011. A drop that would have occurred as part of any major bear market had never happened before this scale.
2017–2019 second bear market
In late 2017 and early 2018, the price of Bitcoin fell by more than 80%, from $19,000 to $3,100. Meanwhile, its market cap fell from $300 billion to $30 billion. The hash rate also fell from 8.5 exa hashes to 1.5 exa hashes during this period. An indicator that they mined miners out of profitability due to increased competition for coins.
These bear markets have been brutal because they came quickly after the last bull run. A move that saw Bitcoin’s price rise over 2x within about two years from $1 million in 2010 up until mid-2017.
The next bull market in Bitcoin will be a long one. The next bear market will be healthy and stable, with no major crashes or crashes that do not recover completely within two years.
It’s important to note that these are just predictions based on history.
Final Words
After the 10th-anniversary bull market and crash of 2022, it’s hard to predict what will happen next. But there are some good signs that this bear market may be coming to an end soon.
New regulations have been put in place, and institutional investors are getting more involved in crypto investing every day so that we could see a lot more stability and growth on the horizon for cryptocurrency markets worldwide.
