From extreme highs to lows, fasten your seat belt, and welcome to the rollercoaster of cryptocurrencies. Degens may be worried by the recent downturn of the crypto king, BTC crashing down from the highest heavens of $49,000 recorded in March to flaunting with $20,000 this month and leaving DeFI with a cold, Terra imploding, Celsius and 3ac running into problems.
As of June 15, after the Fed announced its interest rate hike of 0.75%, the ailing market showed temporary signs of recovery as the green candles resurfaced, albeit temporarily. The industry will beat this current scourge; the successes recorded already are testament to this as each time BTC’s price plunges, it always bounces back stronger.
Most dips in the crypto market are caused by at least one, if not more, factors. In this piece, we will highlight the prior dips and recovery made by our nascent crypto market, as represented by the price of Bitcoin, and the culprit responsible- don’t worry, we won’t be making any arrests.
Bitcoin was launched in 2009, and in 2011, its price climbed from $2 to $32 for half a dozen months, selling on the now-deceased Mt.Gox before plummeting to $0.01 in June after the exchange was attacked. Hackers had attacked hundreds of accounts and made away with Bitcoins worth billions. Afterward, there was uncertainty over the solvency of the biggest exchange at that time, Mt.Gox. However, the exchange recovered, and 2012 was relatively uneventful as trading resumed and BTC’s price gradually ascended.
The Culprit: Hackers
In December 2013, BTC lost about 50% of its value; after a high of $1,150 before losing half of its price that same month, Crypto’s largest coin did not fully recover until 2017, beginning its ascent in January and reaching a high of $19,000 in December that year. China had banned crypto by prohibiting banks from participating in any Bitcoin-related transactions a few days after BTC hit its major milestone, crossing the $1000 mark for the first time on the Mt.Gox exchange.
The culprit: The China crypto ban
In 2017, BTC gained some muscles and broke its $1000 ceiling, hitting $2000 in May before reaching $19,000 for the first time in December that year. After some dips and sideways movement, February 2018 saw BTC plummeting to around $7000; it stayed below $10,000 for the most of 2018.
Analysts thought it had found comfortable support at around $6000, only for BTC to sink even lower to reach a new low of $3,300, summing up a harsh roller-coaster year for crypto’s largest coin. It went on to make a full recovery reaching a peak of $12,992 the following year. The hacks in Korea and Japan, and the anxiety over crypto regulation, may be attributed to the BTC price’s torrid movement.
The Culprit: Hackers
The year 2020 will be remembered not so fondly as the year of the covid-19 pandemic; with the disease ravaging people and economies, not even the highest performing assets of the decade-according to NASDAQ, were spared. With the globally enforced lockdown, people did not have the luxury of holding or trading crypto. Having traded at $10,000 in February, the value of BTC sank to $5000 in March; however, prompted by the efforts of the US Federal Reserves, prices maintained an upward trend for the rest of the year, hitting a high of $27, 000 in December.
The Culprit: Covid-19 pandemic
2021 is regarded as the breakout year for crypto, with BTC reaching an astronomically high price of $68,000 in November 2022 and drawing all kinds of interest from enthusiasts, retail investors, and even critics. However, BTC started 2021 at around $27,000, recording some up and down movements before peaking at $63,000 in April, then dipping to $29,971 in July, its lowest value for 2021, before recovering. Some factors were attributed to this; firstly, Elon musk backtracked from his earlier stance and stated that Tesla would stop using Bitcoin for payments due to environmental concerns. Secondly, China’s crackdown on crypto.
The Culprit: Elon Musk
After BTC’s initial dip to about $35,000 in January, it waited till May to cross that resistance and has since been on a downward slope; it recorded a low of a little above $20,000 after a tumultuous week where more than $200 billion, worth of assets was sold off. The dip recorded this year can also be attributed to the UST-Terra crash, the equity market-which has also dipped, and the interest rate hike.
Although we are still midway through the year, there is some optimism that the market will recover from its current lows.
The Culprit: Terra + equity market+ interest rate hike
The nascent Crypto market has come through several dips and recoveries for over a decade, and each time it came back stronger reaching new highs. The overall crypto market capitalization hit $3 trillion in November last year. It took Microsoft, Apple, Amazon, and even Google more than 20 years to reach a $1 trillion market cap, unlike BTC, which needed just 12 years to reach that figure. Hence, there is room for optimism.