A brief history of Bitcoin crashes and bear markets: 2009-2022
bitcoin (btc) experienced one of its most brutal drops in 2022, with the price of btc falling below $20,000 in June after reaching a high of $68,000 in 2021.
June 2022 has become the worst month for bitcoin since September 2011, as its monthly losses amounted to 40%. the cryptocurrency also posted its biggest quarterly losses in 11 years.
Reading: Bitcoin crashes history
However, the current market sell-off does not make bitcoin crash and bear markets exclusive to 2022. In fact, bitcoin has survived its fair share of crypto winters since the first bitcoin block, or block, was mined. of genesis. in January 2009.
As we zoom out of the bitcoin price chart, Cointelegraph has picked up five of the most notable price declines in the history of the fundamental cryptocurrency.
bear market no. 1: bitcoin drop from $32 to $0.01 in 2011
time to retest previous maximum: 20 months (June 2011-February 2013)
Bitcoin price broke above its first major psychological mark of $1 in late April 2011 to begin its first rally to $32 on June 8, 2011. But the joy didn’t last long as bitcoin subsequently crashed value all the way down to just $0.01 over the course of a few days.
The strong sell-off was largely attributed to security concerns at the now-defunct Mt. gox, a Japanese crypto exchange that traded the majority of bitcoin at the time. 850,000 btc were stolen from the exchange due to a security breach on its platform, raising serious concerns about the safety of bitcoins stored on exchanges.
with btc losing around 99% of its value in a few days, bitcoin’s flash crash in june 2011 became a huge part of bitcoin history. the event opened a long period before the price of btc recovered to the previous high of $32 and rose to new highs only in february 2013.
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It’s hard to track the price of bitcoin prior to 2013 compared to the most recent charts. Popular price tracking services and sites like coingecko or coinmarketcap do not track bitcoin prices before April 2013.
“Bitcoin was in its infancy before 2013 and there weren’t many places that traded bitcoin back then,” Coingecko COO Bobby Ong told Cointelegraph. He added that coingecko hasn’t received many requests for data prior to 2013, so it has a low priority for the platform.
bear market no. 2: bitcoin tanks from $1,000 to less than $200 in 2015
time to retest previous high: 37 months (Nov 2013-Jan 2017)
According to btc price data compiled by cointelegraph, the price of bitcoin hit $100 in mid-April 2013 and then continued to rise, briefly reaching $1,000 in November 2013.
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bitcoin entered a massive bear market shortly after breaking $1000 for the first time ever, with the price of btc falling below $700 a month later. The price drop came as the Chinese central bank began cracking down on Bitcoin in late 2013, banning local financial institutions from handling BTC transactions.
The cryptocurrency continued to plummet over the next two years, bottoming out around $360 in April 2014 and then falling further to hit a low of $170 in January 2015.
The long cryptocurrency winter of 2014 became associated with the hacked Mt. Gox crypto exchange, which halted all Bitcoin withdrawals in early February 2014. The platform then suspended all trading and eventually filed for bankruptcy in Tokyo and in the United States.
Some major financial authorities have also raised concerns about bitcoin, with the us. uu. commodity futures trading commission that claimed it had power over “bitcoin price manipulation” in late 2014.
The general sentiment around bitcoin was mainly negative until August 2015, when the trend began to reverse in the long term. Amid the strong bull market, bitcoin finally returned to the $1,000 price mark in January 2017. This was the longest all-time high price recovery period in bitcoin history.
bear market no. 3: bitcoin dips below $3,200 after hitting $20,000 in December 2017
time to retest previous maximum: 36 months (December 2017-December 2020)
after rallying to $1,000 in January 2017, bitcoin continued to rise to $20,000 by the end of that year.
However, like bitcoin’s previous all-time high of $1,000, the $20,000 triumph was short-lived, as bitcoin fell and lost more than 60% of its value in a couple of months.
2018 quickly turned into a “crypto winter” as the bitcoin market continued to shrink, with btc bottoming out around $3,200 in December 2018.
The crypto winter began with security issues at coincheck, another Japanese cryptocurrency exchange. in january 2018, coincheck suffered a gigantic hack resulting in a loss of around $530 million worth of nem (xem) cryptocurrency.
The bear market was further intensified when tech giants like Facebook and Google banned initial coin offering ads and token sale ads from their platforms in March and June 2018, respectively.
Global crypto regulation efforts also contributed to the bear market, with the US. uu. The Securities and Exchange Commission rejects applications for BTC exchange-traded funds.
Bear market No. 4: BTC slumps from $63,000 to $29,000 in 2021
time to retest previous high: six months (April 2021-October 2021)
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bearish sentiment dominated the crypto market until 2020, when bitcoin not only returned to $20,000, but entered a massive bull run, breaking above $63,000 in April 2021.
Even though 2021 turned out to be one of the biggest years for bitcoin, with the cryptocurrency surpassing a market capitalization of $1 trillion, bitcoin also suffered a slight downside.
shortly after breaking new all-time highs in mid-April, bitcoin pulled back slightly, its price eventually falling to $29,000 in three months.
The 2021 mini bear market came amid a growing media narrative suggesting bitcoin mining has a corporate, social and environmental governance (esg) problem.
The global esg-related fid around bitcoin was further exacerbated with elon musk’s electric car company tesla stopping using bitcoin as payment in may, with the chief executive citing esg concerns. just three months later, musk admitted that around 50% of bitcoin mining was powered by renewable energy.
The bear market did not last long even though China launched a major campaign against local mining farms. the uptrend returned in late July, with bitcoin eventually rising to its still intact all-time high of $68,000 recorded in November 2021.
bear market no. 5: bitcoin crashes from $68,000 to less than $20,000 in 2022
time to retest previous high: TBD
Bitcoin failed to break above $70,000 and began to slide in late 2021. The cryptocurrency has been sliding into a bear market since November of last year, posting one of its biggest drops ever in 2022.
In June, the cryptocurrency fell below $20,000 for the first time since 2020, creating extreme fear in the market.
The ongoing bear market is largely attributed to the crisis of algorithmic stablecoins — namely the TerraUSD Classic (USTC) stablecoin — which are designed to support a stable 1:1 peg with the U.S. dollar through blockchain algorithms rather than equivalent cash reserves.
ustc, once a major algorithmic stablecoin, lost its peg to the dollar in May. ustc’s decoupling caused a mass panic in the broader crypto markets, as the stablecoin had managed to become the third largest stablecoin in existence before crashing.
The collapse of terra caused a domino effect on the rest of the crypto market due to massive sell-offs and uncertainty leading to a crisis in cryptocurrency lending. A number of global crypto lenders like Celsius had to suspend withdrawals due to their inability to maintain liquidity amid brutal market conditions.
Bitcoin has historically seen its price trade below previous highs for more than three years. the previous peak of $68,000 took place just seven months ago, and if and when bitcoin will return to new heights remains to be seen.
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