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Bitcoin Historical Corrections & What We Can Learn

Cryptosomniac Advantage

Much like any market, Cryptocurrency is subject to market corrections.  Last year, Bitcoin saw it's all time high of nearly $20,000 USD.  It would be foolish to think that after experiencing such a dramatic increase in price last year, a price correction would not only be necessary, but actually help create stable footing for it's price in the future.  This is not uncommon though, no matter how bloody your wallets feel right now.  In fact, this correction hasn't been as bad as previous ones, at least not yet!  Let us take a look at some of the Bitcoin historical corrections.

Bitcoin Historical Corrections
  • 2011: 93%
  • 2014: 86%
  • 2018: 83% (so far)
Bitcoin Historical Corrections
2011 Correction

Bitcoin's first major correction occurred in 2011.  It made a entrancement of over 93% during its early days.  Back then, Bitcoin was not well known and used primarily on dark net sites for illicit services and drugs.  It made a rampant move from below a dollar to about $30 inside of several weeks.  Afterwards, excitement waned and Bitcoin was labeled a faulty monetary system used only for illegal activities and bottomed out at around $2.00.   

2014 Correction

In 2014 Bitcoin suffered a severe setback.  This was due largely because of the Mt. Gox Heist that left Bitcoin users with little confidence in the ecosystem.  At the time, Mt. Gox was the largest operating crypto exchange in the world, handling over 70% of all Bitcoin transactions.  Mt. Gox filed for bankruptcy in early 2014 after having lost over 850,000 Bitcoins valued at $450 million dollars at the time.  Most of the Bitcoins were eventually found to have been stolen over a period of time dating back to 2011 from the exchanges hot wallet.  

Mt. Gox

Before the Mt. Gox debacle, Bitcoin breached the $1,000 mark.  Afterwards, and for most of 2014 Bitcoin slowly declined bottoming out at a price of around $160.  It would remain such for most of the year 2015 before picking up speed in 2016 and 2017.


2018 Correction

2018 brought an end to Bitcoin's best year.  Cryptocurrency garnered widespread attention, multiplying in price several times during the year of 2017.  Many ICO's launched and prompted users to purchase more Bitcoin as it was the primary "on-ramp" for investing into other altcoins and cryptocurrencies.  The price of Bitcoin reached almost $20,000 catching the eyes of fortune 500 companies, the SEC, and people all over the world.  

Bitcoin Comes Crashing Down

Bitcoin has retraced about 83% from it's all time high and has recently stabilized around the $3,400 mark.  Unlike previous crashes, BTC's current price is likely due to a compilation of several things.  Bitcoin shorts launched late in December of 2017.  The SEC started cracking down on formal regulations for many ICOs, spawning the creation of the more regulation Security Token Offering (STO).  Furthermore, user design and advances in the technology appear to have been far behind what the price reflects. 

Essentially, Bitcoin's current price should not come as a surprise.  If we are to learn anything from Bitcoin historical corrections, this is completely normal and to be expected. Markets are cyclical and should be expected to repeat themselves.  

Looking to the bright side though, it appears we may be close to our bottom given we have retraced 83% of the way, which is comparable to some of the other corrections we have seen.  Please remember to take a breather, and realize that the blockchain industry is not leaving, but prices of cryptocurrency may not increase in value at the rate you desire them to right now.  But let us hope that 2019 turns things around!


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