With bitcoin reaching an all-new low and many people panicking over the current state of the market, it is always important to provide a fresh and objective perspective.
And there’s none better than reminding investors of bitcoin’s history –with particular emphasis on its best performing and non performing periods. This will help investors and traders make more rational investment decisions, as against depending on current market trends to do so.
This was about a year after bitcoin was created and people had started buying into the idea. During these early days, bitcoin’s value gradually rose in 2010, peaking at $32 per BTC in June of 2011.
After that month, bitcoin suffered a gradual loss in value, bottoming out at $2 per by November 2011. Naturally, because the cryptocurrency was a new investment tool, many investors decided to bail and sold off their crypto assets –primarily bitcoin at the time.
For many of these folks, that means they sold at a 94 percent loss. Those who bought at that low price of $2 are right now, thinking that was the smartest financial decision they ever made. Even with the current “low price”, their bitcoins have yielded roughly 1,100 percent ROI.
That means if you had bought just 100 BTC at the time for a measly $200, it would be roughly valued at around $350k right now. Those who stuck it out are most likely “rolling in it now”. And if they bought huge volumes at the time, they’ll probably never worry about money for the rest of their lives.
The second bitcoin slump. This saw the cryptocurrency suffer its worst and most public slump in its history. This is a very notable period because bitcoin had become increasingly popular and more people were aware of its potential as a good investment opportunity.
November 2013 saw bitcoin rise to an awesome $1,200 per, courtesy of a favorable hearing by the US Senate. During the hearing, the Senate tacitly gave bitcoin a “stamp of approval”, with even China cautiously piling on.
Of course, the $1,200 pales in comparison to what we have now, but it was a huge deal at the time. Unfortunately, China decided that bitcoin wasn’t a currency after all, and started imposing restrictions on the trade and exchange of the cryptocurrency within its borders.
The clamp down by China triggered a cascade of events that resulted in a bitcoin’s price plummeting to a low $378. Unfortunately, the currency didn’t rally for a while, no thanks to the 2014 Mt Gox hacking incident which was responsible for the loss of 7 percent of all bitcoins in circulation, as well as multiple hack attacks designed to steal even more coins. This 411-days bearish stretch lasted till January 2015, with bitcoin’s price falling as low $150.
This is the month in which bitcoin suffered its worst price dips in history. In that month, bitcoin’s price had risen to an impressive $260. This saw traders, investors and experts, riding the bullish trend.
Then suddenly, the cryptocurrency’s price crashed to $45 within 48 hours –an 83 percent loss in value. This single event saw traders and investors, panicking and selling off their tokens, and exiting the market with their tails between their legs. Many were badly burnt by this turn of events, losing huge sums in the process.
This was the bitcoin’s best month ever. In fact, the whole of 2017 was an amazing year for bitcoin.
It saw the crypto rise from less than a $1,000 to a dizzying $20k by December 2017, boasting a jaw dropping 1,950 percent ROI and effectively growing its market cap by over $400 billion.
Of course, bitcoin rode into the new year on this same high, after which the price drop started, and has continued through the year. Compared to its all-time high, it’s easy to see why many investors might be panicking.
The good news though, is overall, bitcoin isn’t doing so badly. After all, it’s currently priced at about 400 percent of its December 2016 price.
Last month was called the red month for crypto investors and traders. Of course, the market had been performing woefully for the better part of 2018. However, November saw bitcoin’s price plummet to a new low –its lowest price in over 18 months.
As at today, bitcoin has lost more than 83 percent of its value at the beginning of the year when it was priced at over $19k. Some analysts have compared the price drop to NADAQ’s woeful performance at the height of the dotcom bubble fallout, and have stated that bitcoins price drop is worse.
Unfortunately, bitcoin is not alone in its value loss. Because it’s the pioneer cryptocurrency, as well as the market’s pillar, its price fluctuation has resulted in a widespread price crash in the market. Almost all altcoins that rode its wave, have seen a loss of at least 50 percent.
Many of these altcoins’ value are hinged on bitcoin’s performance, which means now that it’s not performing, they are suffering the attendant effects. A good example of this is Ethereum which was priced at almost $1500 at the beginning of the year. The crypto has dropped in value from a four digit token to a measly two digit –fluctuating between $80 and $90.
Bitcoin’s November price bottom ushered in a new era, pushing the crypto market to new lows. In fact, the total valuation of the crypto market is now less than $120 billion.
The cryptocurrency market has always been a highly volatile one. Savvy and experienced investors know this and understand that the market will correct… eventually. New retail investors don’t know this unfortunately.
As a result, many are panic selling and trying to get out of the market as soon as possible –see a trend here?- to salvage whatever they have left.
The truth is this will always happen. If you want to be in this market, and make a fortune from it, you have to be willing to play the long game. The days of quick profits are a distant thing –for now.
If you need help, just follow the news. Sometimes, all it takes for the market to start its rally is a positive news item. While you follow the news, do it rationally. Don’t react emotionally.
It’s all doom and gloom at the moment; and that’s okay. It’s always like that. Just sit tight, and enjoy the rollercoaster. No one ever said, it would be easy, but you can be sure that it’ll be a lot of fun.
Bitcoin and its sister currencies will recover –in due time. Investors just need to be patient and wait out the “bear”. Now that you have this information, you can make an informed decision on whether to stay or get out. Smart traders and investors are hunkering down and waiting it out? How about you? Want to stay put or walk away? The choice is yours.
The views and opinions expressed in the article Understanding Bitcoin’s Highest and Lowest Price Points is Crucial to Crypto Investment Decisions do not reflect that of 48coins.com nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.