A brief history of Bitcoin crashes and bear markets: 2009–2022

by · July 10, 2022

Bitcoin (BTC) experienced one of its most brutal crashes ever in 2022, with the BTC price plummeting below $ 20,000 in June after reaching a peak of $ 68,000 in 2021.

June 2022 has been the worst month for Bitcoin since September 2011, when monthly losses rose to 40%. The cryptocurrency also had its largest quarterly losses in 11 years.

However, current market sales do not make Bitcoin crashes and bear markets exclusive until 2022. In fact, Bitcoin has survived its fair share of cryptocurrencies since the first Bitcoin block, or genesis block, was mined back in January 2009.

As we zoom out the Bitcoin price chart, Cointelegraph has picked up five of the most notable price declines in the history of the most central cryptocurrency.

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

Time to retest previous high: 20 months (June 2011 – February 2013)

Bitcoin price broke its first major psychological mark of $ 1.00 back in late April 2011 to start its first ever rally that reached $ 32 on June 8, 2011. But the joy did not last long, as Bitcoin then fell in value to the bottom of just $ 0.01 in a few days.

The strong sales were largely attributed to safety issues at the now defunct Mt. Gox, a Japanese cryptocurrency exchange that traded most of Bitcoin at the time. The exchange saw 850,000 BTC stolen due to a security breach on the platform, which raises major concerns about the security of Bitcoin stored on exchanges.

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

It is difficult to track the Bitcoin price before 2013 compared to 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 were not many places that traded Bitcoin at the time,” CoinGecko chief operating officer Bobby Ong told Cointelegraph. He added that CoinGecko has not received many requests for data before 2013, so it is a low priority for the platform.

Bear Market # 2: Bitcoin tanks from $ 1000 to under $ 200 in 2015

Time to test the previous peak again: 37 months (November 2013 – January 2017)

According to BTC price data collected by Cointelegraph, Bitcoin price reached $ 100 in mid-April 2013 and then continued to increase for a short time now $ 1000 in November 2013.

Bitcoin entered a massive bear market shortly after breaking $ 1,000 for the first time in history, with the BTC price falling below $ 700 a month later. The price drop came when the Chinese 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, bottoming at around $ 360 in April 2014 and then falling even more to a low of $ 170 in January 2015.

Bitcoin price chart April 2013 – January 2017. Source: CoinGecko

The long cryptocurrency winter of 2014 was associated with the hacked Mt. The Gox cryptocurrency exchange, which stopped all Bitcoin withdrawals in early February 2014. The platform then suspended all trading and eventually filed for bankruptcy in Tokyo and the United States.

Some major financial authorities also raised concerns about Bitcoin, with the US Commodity Futures Trading Commission claiming that it had power over “Bitcoin price manipulation” at the end of 2014.

The general sentiment around Bitcoin was mainly negative until August 2015, when the trend started a long-term reversal. In the midst of the strong bullish market, Bitcoin eventually returned to the $ 1000 price in January 2017. This was the longest recovery period for high prices in Bitcoin’s history.

Bear Market No. 3: Bitcoin plunges below $ 3,200 after reaching $ 20,000 in December 2017

Time to test the previous peak again: 36 months (December 2017 – December 2020)

After recovering to $ 1,000 in January 2017, Bitcoin continued to rise to as high as $ 20,000 by the end of that year.

However, like Bitcoin’s previous historic peak of $ 1,000, the triumph of $ 20,000 was short-lived, as Bitcoin later fell and lost more than 60% of its value within a few months.

The year 2018 was quickly referred to as a “crypto winter” as the Bitcoin market continued to shrink, with the BTC bottom of around $ 3200 in December 2018.

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

The bear market escalated further as technology giants such as Facebook and Google banned ads for introductory coin offers and token sales ads on their platforms in March and June 2018, respectively.

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

Bitcoin Price Chart December 2017 – December 2020. Source: CoinGecko

Bear Market No. 4: BTC will fall from $ 63,000 to $ 29,000 in 2021

Time to test the previous peak again: six months (April 2021 – October 2021)

The Bearish mood dominated the crypto market until 2020, when Bitcoin not only returned to $ 20,000, but entered a massive bull run, peaking at more than $ 63,000 in April 2021.

Despite the fact that 2021 was one of the biggest years for Bitcoin, when the cryptocurrency passed a market value of 1 trillion dollars, Bitcoin also suffered a slight disadvantage.

Shortly after breaking new records in mid-April, Bitcoin withdrew slightly, eventually dropping to as low as $ 29,000 in three months.

The mini bear market in 2021 came in the middle of a growing media narrative that suggests that Bitcoin mining has a problem related to the environment, social and corporate governance (ESG).

The global ESG-related RD&D around Bitcoin had further deteriorated with Elon Musk’s electric car company Tesla dropping Bitcoin as payment in May, and the CEO citing ESG concerns. Just three months later, Musk admitted that about 50% of Bitcoin mining was powered by renewable energy.

The bear market did not last long despite China launching a major attack on local mining farms. The bullish trend returned in late July, with Bitcoin finally rising to its still unbroken record of $ 68,000 posted in November 2021.

Bear Market # 5: Bitcoin drops from $ 68,000 to under $ 20,000 in 2022

Time to test the previous pile: to be determined

Bitcoin failed to break $ 70,000 and began to fall in late 2021. The cryptocurrency has slipped into a bear market since November last year, registering one of its biggest historical crashes in 2022.

In June, the cryptocurrency plunged below $ 20,000 for the first time since 2020, leading to extreme market fears.

The ongoing bear market is largely attributed to the crisis with algorithmic stack coins – namely TerraUSD Classic (USTC) stack coins – which are designed to support a stable 1: 1 link with US dollars through blockchain algorithms instead of corresponding cash reserves.

The USTC, once a major algorithmic stablecoin, lost its dollar bond in May. Deployment by the USTC triggered a massive panic across broader crypto markets as the stack coin had managed to become the third largest stack coin to exist before it collapsed.

The collapse of Terra caused a domino effect on the rest of the crypto market due to massive liquidations and uncertainty that led to a crisis in cryptocurrency lending. A number of global crypto borrowers such as Celsius had to suspend withdrawals due to their inability to maintain liquidity in the midst of brutal market conditions.

Bitcoin has historically had its price trading below previous highs for more than three years. The previous peak of $ 68,000 took place just seven months ago, and it remains to be seen if and when Bitcoin will return to new heights.