Long-time HODLers have already faced many other bear markets: let's take a look at the five most significant price declines in Bitcoin's history
Analysis • This year Bitcoin (BTC) experienced one of the most brutal crashes ever: in June the value of the asset slipped below $20,000, despite peaking at $68,000 in 2021. June 2022 became bitcoin's worst month since September 2011, with monthly losses of 40%. The cryptocurrency also posted the heaviest quarterly losses in the last 11 years. But since its inception way back in January 2009, the asset has faced and survived numerous bear markets. Let's take a look at the five most significant price drops in Bitcoin's history. 2011: $32 to $0.01 Time needed to return to previous highs: 20 months (June 2011 – February 2013) The price of Bitcoin broke $1, a very important psychological milestone, in April 2011; this started its first rally up to $32 in June 2011. But the joy was short-lived, as in a few days the price of the cryptocurrency collapsed to $0.01. The sell-off was mainly attributed to the first hacker attack against the now defunct Mt. Gox, a Japanese cryptocurrency exchange on which Bitcoin trading took place but the vast majority. The platform suffered the theft of 850,000 BTC, raising concerns about the actual security of centralized exchanges. Given that the asset lost about 99% of its value in just a few days, the June 2011 crash is by far the worst in Bitcoin's history. The event kicked off a long period of recovery, and the asset broke through its previous high of $32 in February 2013. "Haha, great: Bitcoin collapsed to $0.01." It's hard to keep track of Bitcoin's price before 2013, as popular platforms like CoinGecko or CoinMarketCap don't present data before that date. "Bitcoin was in its infancy before 2013, there weren't many places where you could trade BTC at the time," Bobby Ong, CoinGecko's chief operating officer, told Cointelegraph. He added that users do not seem particularly interested in data prior to 2013, and therefore does not represent a priority for the platform. 2015: $1,000 to $170 Time needed to return to previous highs: 37 months (November 2013 – January 2017) According to BTC price data collected by Cointelegraph, the price of Bitcoin reached $100 in mid-April 2013, then continued to grow until it crossed the $1,000 wall in November of the same year. A little later Bitcoin entered a huge bear market, and only a month later the value of the asset was $700. This time the price drop was caused by China's central bank, which in late 2013 banned local financial institutions from handling BTC transactions. The price of the cryptocurrency continued to plummet over the next two years, hitting a low of $360 in April 2014 and $170 in January 2015. Bitcoin price from April 2013 to January 2017. Source: CoinGecko The long crypto winter of 2014-2015 is also attributed to the mt . Gox, which in February 2014 stopped all Bitcoin withdrawals. The platform subsequently suspended trading and finally declared bankruptcy. General sentiment on Bitcoin remained negative until August 2015, when the trend began a long-term reversal: the price returned to $1,000 in January 2017. This was the longest recovery period in the asset's history. 2017: $20,000 to $3,200 Time needed to return to previous highs: 36 months (December 2017 – December 2020) After reaching $1,000 in January 2017, the price of Bitcoin continued to rise, reaching a peak of $20,000 at the end of the year. However, just like the previous high of $1,000, the triumph was short-lived: within a few months, the asset's value plummeted by more than 60%. 2018 was another bad year for the cryptocurrency, which hit a low of $3,200 in December. The crypto winter began with the discovery of a security flaw at Coincheck, another Japanese cryptocurrency exchange. In January of 2018, the platform suffered a hacker attack that caused the loss of about $530 million in NEM (XEM). The bear market intensified further when tech giants such as Facebook and Google banned ads related to the sale of digital assets on their platforms in March and June 2018, respectively. The introduction of stricter regulations around the world has also contributed to the bear marker. In addition, at the time the U.S. Securities and Exchange Commission had rejected the first requests for Bitcoin-based ETFs. Bitcoin price from December 2017 to December 2018. Source: CoinGecko 2021: $63,000 to $29,000 Time needed to return to previous highs: 6 months (April 2021 – October 2021) Bearish sentiment dominated the cryptocurrency market until 2020, when Bitcoin not only returned to $20,000, but started a bull run that pushed the price to a peak of $63,000 in April 2021. 2021 has been a very important year for Bitcoin, as in this period the cryptocurrency has reached and exceeded a market cap of 1,000 billion dollars. But after April's all-time highs, BTC retreated slightly, slipping to $29,000 within three months. The short bear market of 2021 was mainly caused by the media narrative that Bitcoin mining harms the environment. This FUD has been further exacerbated by the interruption of support for BTC by Tesla, Elon Musk's electric car company , precisely because of fears related to the environmental impact of the cryptocurrency. But just three months later, Musk himself admitted that about 50% of Bitcoin mining uses renewable energy: "The FUD Cycle." Fortunately, this bear market did not last long, despite the mining ban imposed in China. The uptrend returned at the end of July, and in November 2021 Bitcoin reached its current all-time high of around $68,000. 2022: $68,000 to under $20,000 Time needed to return to previous highs: to be determined. But Bitcoin failed to break through the $70,000 wall, and in late 2021 the price of the cryptocurrency began to fall. 2022 was one of the worst years ever for the asset: in June, the price slipped below $20,000 for the first time since 2020, spreading a strong fear in the markets.
The ongoing bear market is mainly attributed to the crisis of algorithmic stablecoins — such as TerraUSD Classic (USTC) — designed to maintain a stable peg to the U.S. dollar via mathematical systems on the blockchain, rather than holding immense liquid reserves. USTC, once one of the leading algorithmic stablecoins, lost its peg to the dollar in May. Given that USTC was the third largest cryptocurrency in the market, its collapse had cascading effects on the entire industry: companies like Celsius, a crypto lending company, had to suspend withdrawals due to adverse market conditions. Historically, Bitcoin tends to fluctuate below its previous high over a period of about three years. The peak of $68,000 was recorded only seven months ago, so the full recovery of the asset could still be a long way off.