A Brief History of Bitcoin Crashes and Bear Markets: 2009-2022

Bitcoin (BTC) experienced one of its most brutal crashes on record in 2022, with the price of BTC dropping below $20,000 in June after peaking at $68,000 in 2021.

June 2022 became Bitcoin’s worst month since September 2011, with monthly losses reaching 40%. The cryptocurrency also posted its biggest quarterly losses in 11 years.

However, the current market sell-off does not make Bitcoin crashes and bear markets exclusive to 2022. In fact, Bitcoin has survived its fair share of crypto winters since the first Bitcoin block, or genesis block, broke. was mined in January 2009. .

As we zoom out of the Bitcoin price chart, Cointelegraph recorded five of the most notable price declines in the history of the seminal cryptocurrency.

Bear Market #1: Bitcoin Crash from $32 to $0.01 in 2011

Time needed to retest the previous peak: 20 months (June 2011-February 2013)

The price of bitcoin broken its first major psychological mark of $1.00 in late April 2011 at beginning its first-ever rally to hit $32 on June 8, 2011. But the joy didn’t last long, as Bitcoin’s value then plummeted to just $0.01 within days.

The sharp selloff was widely attributed to security issues at the now-defunct Mt. Gox, a Japanese crypto exchange that traded the majority of Bitcoin at the time. The exchange saw 850,000 BTC stolen due to a security breach in its platform, raising major concerns about the security of Bitcoin stored on exchanges.

With BTC losing around 99% of its value in a matter of days, Bitcoin’s flash crash of June 2011 became a big part of Bitcoin history. The event opened a long stretch before the price of BTC returned to the previous high of $32 and climb to new heights only in February 2013.

It is difficult to follow the price of Bitcoin before 2013 compared to more recent charts. Popular price tracking services and sites like CoinGecko or CoinMarketCap do not track Bitcoin prices until April 2013.

“Bitcoin was in its infancy before 2013 and there weren’t many places trading Bitcoin back then,” Bobby Ong, COO of CoinGecko, told Cointelegraph. He added that CoinGecko did not receive many data requests prior to 2013, so it is low priority for the platform.

Bear Market #2: Bitcoin Tanks from $1,000 to Under $200 in 2015

Time needed to retest the previous peak: 37 months (November 2013-January 2017)

According to BTC price data collected by Cointelegraph, Bitcoin price achieved $100 in mid-April 2013, then continued to climb to briefly reach $1,000 in November 2013.

Bitcoin entered a massive bear market shortly after breaking above $1,000 for the first time in history, with the price of BTC falling below $700 a month later. The price drop came when China’s central bank began cracking down on Bitcoin in late 2013, banning local financial institutions from handling BTC transactions.

The cryptocurrency continued to fall over the next two years, reaching around $360 in April 2014 and then dropping even further to a low of $170 in January 2015.

Bitcoin price chart from April 2013 to January 2017. Source: CoinGecko

The long cryptocurrency winter of 2014 was associated with the hack of the Mt. Gox crypto exchange, which halted all bitcoin withdrawals in early February 2014. The platform then suspended all exchanges and eventually deposited its track record in Tokyo and the United States.

Some major financial authorities have also raised concerns about Bitcoin, with the U.S. Commodity Futures Trading Commission claiming it had power over “Bitcoin price manipulation” in late 2014.

The general sentiment around Bitcoin was mostly negative until August 2015 when the trend started a long-term reversal. Amid a strongly bullish market, Bitcoin finally returned to the $1,000 mark in January 2017. This was the longest all-time high price recovery in Bitcoin’s history.

Bear market #3: Bitcoin plunges below $3,200 after hitting $20,000 in December 2017

Time to retest previous high: 36 months (December 2017 to December 2020)

After hitting $1,000 in January 2017, Bitcoin continued to climb to $20,000 by the end of that year.

However, like Bitcoin’s previous all-time high of $1,000, the triumph of $20,000 was short-lived as Bitcoin then plummeted and lost over 60% of its value in a matter of months.

2018 was quickly dubbed a “crypto winter” as the Bitcoin market continued to contract, with BTC reaching around $3,200 in December 2018.

The crypto winter started with security issues on Coincheck, another Japanese cryptocurrency exchange. In January 2018, Coincheck suffered a gigantic hack resulting in the loss of around $530 million from the NEM cryptocurrency (XEM).

The bear market intensified further when tech giants like Facebook and Google banned initial coin offering ads and token sale ads on their platforms in March and June 2018, respectively.

Global crypto regulatory efforts also contributed to the bear market, with the US Securities and Exchange Commission rejecting applications for BTC exchange-traded funds.

Bitcoin price chart December 2017-December 2020. Source: CoinGecko

Bear Market #4: BTC drops from $63,000 to $29,000 in 2021

Time to retest previous high: six months (April 2021 to October 2021)

Bearish sentiment dominated the crypto market until 2020, when Bitcoin not only returned to $20,000, but entered a massive bull run, surpassing $63,000 in April 2021.

Although 2021 has become one of the biggest years for Bitcoin, with the cryptocurrency surpassing a market capitalization of $1 trillion, Bitcoin has also suffered a slight downside.

Shortly after hitting new all-time highs in mid-April, Bitcoin pulled back slightly, with its price eventually falling to $29,000 within three months.

The 2021 mini bear market came amid a growing media narrative suggesting that Bitcoin mining has an environmental, social and corporate governance (ESG) problem.

Global ESG-related FUD around Bitcoin had been further exacerbated with Elon Musk’s electric car company Tesla dropping Bitcoin as a payment in May, with the CEO citing ESG concerns. Just three months later, Musk admitted that around 50% of Bitcoin mining is powered by renewable energy.

The bear market did not last long despite China launching a major crackdown on local mining operations. The uptrend returned at the end of July, with bitcoin finally hitting its all-time high of $68,000 posted in November 2021.

Bear market #5: Bitcoin falls from $68,000 to below $20,000 in 2022

Time to retest previous peak: TBD

Bitcoin failed to break $70,000 and started falling in late 2021. The cryptocurrency has been sliding in a bear market since November last year, recording one of its biggest crashes in history in 2022.

In June, the cryptocurrency plunged below $20,000 for the first time since 2020, fueling extreme fear in the market.

The ongoing bear market is largely attributed to the crisis in algorithmic stablecoins – namely the TerraUSD Classic (USTC) stablecoin – which are designed to support a stable 1:1 parity with the US dollar via blockchain algorithms rather than currency reserves. equivalent cash.

USTC, once a major algorithmic stablecoin, lost its peg to the dollar in May. The USTC depegging sparked massive panic in the broader crypto markets, as the stablecoin managed to become the third-largest stablecoin in existence before collapsing.

Terra’s collapse caused a domino effect on the rest of the crypto market due to mass liquidations and uncertainty fueling a cryptocurrency lending crisis. A number of global crypto lenders like Celsius have had to suspend withdrawals due to their inability to maintain liquidity in brutal market conditions.

Bitcoin has historically seen its price trade below previous highs for over three years. The previous high of $68,000 was just seven months ago, and it remains to be seen if and when Bitcoin will return to new highs.

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