The history of Bitcoin crashes
The latest crash in the value of Bitcoin has some investors thinking the “end of days” are coming. Once bullish “hodlers” and committed individuals now voice their anxieties and fears that this crash implies that the digital assets market may be confronted with a brand-new normal.
While the latest price slump has been depressing, it is best to step back and evaluate the current state of Bitcoin relative to its past. The digital currency has “crashed” many times over the past few years, but how does this latest crash compare to past steep sell-offs?
Top Cryptocurrency Has History of Surviving Crashes
Despite the steep 70% losses during the recent crypto sell-off, this is not an uncommon event for Bitcoin. Since January 2012, there have been thirteen significant crashes in Bitcoin, including this latest loss. Losses have been as insignificant as 30% and as drastic as 87% during these Bitcoin crashes. Compared to its past events, this most recent crash was not even as tough or depressing as it has been in the past.
The latest crash happened within 48 days (December 17, 2017, and February 6, 2018), in which Bitcoin lost 70% of its value. However, if you look at the time frame between April 10, 2013, and April 12, 2013, Bitcoin dropped a massive 83% of its value within three days. The point is that price drops have become very common throughout the crypto market, which is renowned for its speedy volatility. It is essential to turn to data and the facts in times of confusion, rather than to rely on one’s sentiments.
Here is an analysis of the visual, presenting each of the crashes in Bitcoin by date of occurrence. It will also incorporate the percent of value loss and the length of the price drops in the number of days:
- January 12, 2012 – January 27, 2012, -30%, 16 Days
- August 17, 2012 – August 19, 2012, -57%, 3 Days
- March 6, 2013 – March 7, 2013, -33%. 2 Days
- March 21, 2013 – March 23, 2013, -35%, 3 Days
- April 10, 2013 – April 12, 2013, -83%, 3 Days
- November 19, 2013 – November 19, 2013, -50%, 1 Day
- November 30, 2013 – January 14, 2015, -87%, 411 Days
- March 10, 2017 – March 25, 2017, -34%, 16 Days
- May 25, 2017 – May 27, 2017, -33%, 3 Day
- June 12, 2017 – July 16, 2017, -39%, 35 Days
- September 2, 2017 – September 15, 2017, -40%, 14 Days
- November 8, 2017 – November 12, 2017, -30%, 5 Days
- December 17, 2017 – February 6, 2018, -70%, 48 Days
Overall, the latest crash in the price of Bitcoin is not extraordinary. History tells that the top cryptocurrency has experienced much more rapid losses during a shorter period over the course of the past years, yet it has not dissuaded long-term investors.
The main source of the latest crash mainly came from the fears of pervasive regulatory oversight, but the recent digital currency regulatory hearing before the U.S. Senate hit a much brighter tone than crypto investors had expected. This reveals that concerns of regulators trying to shut down the crypto market are overblown.
In the end, cryptocurrency is still a very new concept that will have its challenges, but its resilience in the face of difficulty has been nothing but incredible.