The year 2022 has been a terrible year for Bitcoin and its peers without a question, but will Bitcoin bounce back? Understanding that the cryptocurrency economy and markets have been in this sort of situation several times before.
In Bitcoin’s 12-year existence, there have been four main bull/bear periods. The asset and industry are cast off and proclaimed dead each time by alarmists and the news outlets.
Additionally, according to 99Bitcoins’ obituary page, Bitcoin has ‘died’ 467 times! The first BTC “death” was announced in December 2010, whereas the most recent was on November 30, 2022. The year that saw the most ‘deaths’ was 2017, when the asset was written off at least 124 times by news outlets.
Grayscale, the world’s largest institutional crypto asset manager, has compiled a list of 10 instances in which Bitcoin has bounced from devastating losses.
Will Bitcoin Bounce Back?
The first large drop in Bitcoin prices occurred in 2011, when the value dropped by 99%. The aftermath of the Mt. Gox hack and collapse drove prices on the embattled exchange crashing from $32 to $0.01.
Bitcoin dropped 80% in 24 hours in late 2013 because the Chinese government prohibited financial institutions from utilizing the commodity as a means of payment.
A further Mt. Gox hack in February 2014 caused BTC prices to drop by roughly 60%. At the time, the exchange managed up to 80% of all Bitcoin transactions worldwide.
The DAO hack in mid-2015 hammered both Ethereum and Bitcoin values at the present time. Ethereum was hard forked.
The previous chain was renamed Ethereum Classic (ETC), while the new blockchain was named Ethereum (ETH) as we currently know it. In 2016, there was also a Bitfinex hack, which caused BTC values to drop.
BTC values dropped 84% towards the end of 2018 due to a huge assault on initial coin offerings (ICOs). Prices dropped as low as $3,200 after peaking at $20,000 at the end of 2017.
BTC prices dropped in March 2020 when governments throughout the world implemented lockdown policies, causing markets to crash. In that black swan occurrence, BTC dropped by more than half to roughly $5,000.
Bitcoin markets bowed down twice this year, in May and November. They both occurred following the failures of key platforms Terra/Luna and FTX, accordingly.
The first dropped 50% from $40,000 to $20,000 in two slides in May and June. The second resulted in a 25% drop following the FTX collapse.
Bitcoin has always bounced back after an ill event, and there’s no reason to believe it won’t do so again in 2023.
To put things into perspective, BTC is presently trading 134% higher than it was three years ago at this time.
Will Bitcoin Recover in 2023?
If history repeats itself, the May 2024 BTC halving event will most likely be the primary contributor for a bull market. Prior to the year of halving, there had been a record of minor bitcoin bounce back until the bulls rally as soon as block rewards were halved.