Just one month ago, bitcoin was trading at about $8,000. According to Coinbase, bitcoin was trading at $19,700 on Saturday, and that represented about 35% increase in just 30 days. These recent developments in bitcoin market have no doubt taken a number of investors on a wild ride.
So many people have mentioned the ‘bitcoin bubble’, arguing that the recent price increase is just getting us closer to the time when the ‘bubble’ will burst. But with bitcoin approaching the $20,000 milestone, is a crash really on the horizon?
Let’s take a look at some crashes in Bitcoin’s history, as they will deliver some insight as to whether Bitcoin is here to stay.
- In 2013, Bitcoin dropped from $237 to just $67. What was the cause of this massive crash? It was the impact of bitcoin’s first major encounter with the mainstream media. Before that time, bitcoin has never risen above $30 per unit, but just after different media coverage, it reached $237. This took about 6 months for bitcoin to recover.
- After staying at $120 for most of 2013, it reached $1,150 per coin in late November. But by December, it crashed back to $500. It took about 4 years to get back to $1000 again. It was called the 2013 Bubble. Gox was subsequently shut down a few years later.
- In 2014, Mt. Gox (a bitcoin trading platform) announced that a large-scale hack had taken place. Before then, it was trading at $837 but fell back to $439.
There are still some other events like the Chinese ICO ban and the 2017 summer selloff. These events did affected the price of Bitcoin.
Bitcoin’s unforeseeable future
Given these pasts crashes, it is now clearer that Bitcoin is highly volatile, and can be prone to overnight crashes. As we approach that all-time Bitcoin price at $20,000, be prepared for unforeseen events that can likely happen.