The history of bitcoin bear markets

The bitcoin price has a volatile history. Some 12 years ago, Satoshi Nakamoto’s invention first traded at a price of $0.0008 per bitcoin. Since then, the value of the digital currency has risen sharply and sometimes also fallen just as fast. In such a period of long-term depreciation, one speaks of a ‘bear market’.

Why the term ‘bear market’?

Not only in the world of bitcoin, but throughout the investment industry, the terminology “bear market” is used for periods when prices fall for some time. When prices go the other way and investors are optimistic, it is called a bull market. The reason why these animals are used has to do with the way the bull and the bear attack its prey:

  • A bull moves its horns from low to high and thus hurls its prey upwards, this is synonymous with a rising course.
  • A bear, on the other hand, attacks its prey by striking from high to low with its claw, which can be compared to a falling course.

Bitcoin has already weathered several bear markets. Here’s a concise list of the biggest price drops of bitcoin in a row.

The 2011-2012 bear market

One of the most intense bear markets that bitcoin has endured was the first. After the price rose from a few dollars to almost $30 in a short period of time, it plunged back to $2.10 within a few months. A decrease of no less than 93%(!).

The 2014-2016 bear market

In December of 2013, the price of bitcoin reached the extraordinary milestone of $1000 dollars. Shortly afterwards, two things happened: Silk Road marketplace, an online black market where you could order illegal drugs with bitcoin, went offline and trading platform Mt. Gox collapsed. The price fell about 85% in a short time and Bitcoin was declared dead in many media outlets.

The 2018-2020 bear market

The bear market that received the most media attention was that of 2018. After a huge price increase to $ 20,000, the tide turned. In the end, the price fell about 83% from the top.

The period after the start of the pandemic in March 2020 could also be seen as a bear market. The price fell from $12,000 to $3,000 in just a few weeks, but recovered within a limited time to rise above $60,000.


The 2022- ? bear market

We are also currently in a period in which prices are falling, not just that of bitcoin. The euro is also struggling. Today is the first time in 20 years that the value of 1 euro is equal to 1 dollar. The euro is under pressure as the risk of a recession in the euro area looks increasingly likely. Another article about that soon.

It is always the question when the course will change direction again, but this is difficult to answer. Currently, the value of bitcoin has fallen from its all-time high of about 73%.

So it is not the first time that the bitcoin price has experienced a drop like this. Whether and when the price will go up again is difficult to determine. Bitcoin is increasingly seen as a ‘mature’ investment asset and also correlates more to macroeconomic developments such as inflation figures and decisions by Central Banks. In the past, bitcoin has often proven itself by coming out of bear markets stronger, but the future will tell if that happens again this time!

Read here why bitcoin is down, but far from dead.

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