Obviously, two significant bitcoin price drops in a week have caused minor/major panic in some quarters. Luckily there is plenty of data reminding us that bitcoin has been here before… several times.
I’m Forever Blowing Bubbles
Anybody remember the great bitcoin bubble of 2011? Okay, before my time too. But there was one… and another in early 2013… and yet another started at the end of 2013. Bitcoin maximalists have been taking to Reddit to counter the negativity of the end-is-nigh brigade.
You see! After looking at those charts, doesn’t everything suddenly seem so much better?… What! You want more context?
Admittedly, the 2017 bubble chart doesn’t incorporate the most recent figures… Okay, let’s try this table found on Twitter then.
There we go, proper numbers… So 2011’s 5-month bubble bursting wiped 94% off the price and took 19 months to recover a new all-time high. The two-day pop in April 2013 saw bitcoin lose 83% of its value, yet 7 months later it was posting a new ATH.
Finally, late 2013’s bubble saw a 20-month burst period and 87% drop in bitcoin price, followed by a period of slow and steady growth, hitting a new ATH over three years later.
So losing 80% of value to date, over an eleven-month timescale, isn’t necessarily so bad… if only we knew where the bottom was.
Snatching Success From The Jaws Of Failure
EToro’s Senior Analyst, Mati Greenspan, meanwhile took a less direct approach to confidence bolstering. He simply dropped a Tweet highlighting major losses incurred by the big players during the dot-com bubble of 2000.
I'll just leave this here… pic.twitter.com/YsL0JRFAxA
— Mati Greenspan (@MatiGreenspan) November 22, 2018
Of course, some of these companies never again reached their boom-time glories. But it’s comforting to note that, after a 98.7% drop, Amazon went on to score a 37,000% gain in share price.
Past Behaviour Is Not A Predictor Of Future Performance
Of course, none of this gives us anything concrete to go on, but it does perhaps remind us not to ‘abandon hope, all ye who enter here.’ After all, critics have been proclaimed Bitcoin is dead over 300 times, almost since its birth, and that was ten years ago.
Thus far we have managed to weather the storm, and there is no reason to believe that we won’t still be sailing ten years from now. Despite the events of the past week, volatility has been trending lower year on year for Bitcoin as the number of users grows.
Is Bitcoin on its deathbed (again)? Share your thoughts below!
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