Is Bitcoin Still Worth to HODL? The History of Previous Declines > 50% Tells You Yes.
Patience is the key with Bitcoin.
This issue of In Bitcoin We Trust Newsletter is for all subscribers. To get more insights on Bitcoin, you may be interested to upgrade to the premium package.
Fear continues to prevail in the Bitcoin market. The LUNA Sh*tcoin saga is nearing its epilogue. A disastrous epilogue for thousands of investors who believed in the promises of the founder of Terra Do Kwon. In just a few hours, these investors have lost a lot of money without knowing if they will get anything back in the future.
As of this writing, the price of LUNA is $0.00001, and the price of UST, supposedly a stablecoin, is $0.08. The outstanding supply of LUNA has increased by +46.000% in the last two days. That's monumental, and it's where we see why decentralized hard money with a limited supply of 21 million units like Bitcoin is essential for a better future.
The Bitcoin Fear and Greed Index is currently at 10:
This is among the lowest values recorded since the creation of this index on February 1, 2018.
For all that, there has been a nice rebound in the price of Bitcoin over the past few hours. A rebound that puts the price of Bitcoin back above $30K :
This doesn't mean that the price of Bitcoin will go straight back to $40K. It will take time for confidence to return to the market, and, likely, we will still see the price of Bitcoin testing lower levels below $30K in the days to come.
However, this rebound tells us that many investors with a long-term view see the current price as an opportunity. This is my view, of course, as I have already indicated to you previously.
In the current climate of panic, those who have not yet sold out of fear are still wondering if HODL Bitcoin is still something worthwhile. To help them take a step back and see more clearly, I looked at what happened during the previous 50%+ declines in the price of Bitcoin.
The goal here is to show you why patience is key. While history doesn't always repeat itself, we can see that with Bitcoin, it rhymes strongly. Judge for yourself:
93.8% drop in the price of Bitcoin between 06/06/2011 and 11/14/2011
The price of Bitcoin goes from $32 to $2 in a few months. Once the low is reached, everyone announces the death of Bitcoin. Well, when I say everyone, it's relative, because, at the time, Bitcoin was still confidential.
However, Bitcoin emerged stronger than ever with a new ATH after 81 weeks.
81.0% drop in the price of Bitcoin between 04/08/2013 and 04/15/2013
An 81.0% drop in the price of Bitcoin in April 2013 with a flash crash due to the Mt. Gox affair. The price went from $269 to $51. This is a Black Swan event. Something unpredictable, which is why the recovery is just as spectacular. The price of Bitcoin reaches a new ATH in just 30 weeks.
86.1% drop in the price of Bitcoin between 11/25/2013 and 01/12/2015
After exceeding $1,000 for the first time at the end of 2013, Bitcoin plunged into a Bear Market that caused its price to drop from $1,177 to $164. A drop of -86.1%. Once the bottom is reached, a new ATH will be reached after 169 weeks.
84.1% drop in Bitcoin price between 12/17/2017 and 12/10/2018
Bitcoin experienced a phenomenal Bull Market bringing its price close to $20K at the end of 2017. A speculative bubble forms which bursts and plunges the market into a prolonged Bear Market throughout 2018. The bottom is reached in December 2018 at $3,148. An 84.1% drop in the price of Bitcoin.
Once the bottom is reached, a new ATH is reached 156 weeks later.
72.1% drop in Bitcoin price between 06/24/2019 et le 03/09/2020
The end of this correction is marked by the beginning of the COVID-19 pandemic which induces panic in all liquid markets with Bitcoin's Black Thursday. The price drops from $8K to $3.8K in a few hours. Once the low is reached at $3,858, it takes just 69 weeks for a new ATH to be reached.
In the meantime, the third Bitcoin Halving took place in May 2020.
55.6% drop in Bitcoin price between 04/14/2021 and 06/22/2021
In April 2021, in the euphoria of Coinbase's IPO and with money flowing into the markets due to the Fed's ultra-accommodating monetary policy, the price of Bitcoin reached a new ATH of $64.9K. A few days later, China announced that it was banning Bitcoin mining, which began a 55.6% correction that would see the price of Bitcoin fall to $28,800 by the end of June 2021.
Once the bottom is reached, a new ATH is reached only 26 weeks later on November 10, 2021, at $69K.
63.3% drop in the price of Bitcoin between 11/10/2021 and 05/12/2022
We are still in the midst of this 63.3% crash in the price of Bitcoin as I write this. Various elements have accentuated this trend: the new waves of COVID-19, the war in Ukraine, the Fed's change in monetary policy due to persistently high inflation, as well as the Black Swan represented by the mid-air explosion of the LUNA Sh*tcoin.
The low may have been hit at $25,338 on May 12, 2022. However, nothing is certain at this point. We'll have to see what the next few days and weeks have in store for us in this market, which has not finished surprising us.
Patience always makes a difference with Bitcoin
After reading the various figures I have presented to you, one conclusion is obvious to me: patience always makes the difference with Bitcoin. You have seen that after each previous decline of more than 50% in the price of Bitcoin, a new ATH has finally been reached.
Only the duration of the Bear Markets has varied.
In 2015 and 2018, it took more than 150 weeks each time. In 2021, “only” 26 weeks. In each case, it was the belief in the Bitcoin revolution that made the difference. Those who were able to accumulate BTC during these periods were then greatly rewarded.
I would even go so far as to say that it is in these crash periods when everyone is panicking that the greatest future successes are built. So, it's up to you to take advantage of the current situation by continuing to HODL Bitcoin, and why not, accumulate more if you have the ability.
After that, patience will make all the difference. To answer the question I asked in the title of my article: of course, HODL Bitcoin is still worth it. The price has changed, but the fundamentals remain the same for Bitcoin. Under these conditions, it is an excellent opportunity to buy BTC at this price level.
Stay strong, Stay Bitcoin HODLers.
4 Barriers to Bitcoin Mass Adoption (and Their Solutions). We can trust the Bitcoin community to address these issues in the future.
The Global Debt Overhang Condemns Central Banks Like the Fed To Pretend To Fight Inflation. A sharp rise in interest rates would have devastating effects.
Bitcoin Will Help Prevent Wars, but It Will Not Be a Miracle Peace Weapon. The characteristics of the Bitcoin system will better limit the bad sides of humans.
Inflation in America at 8.3% in April: The Optimistic View vs. the Pessimistic View. The behavior of the financial markets shows that there are two possible views here.
Bitcoin Can Go Below $30K. Here Is Why I Continue To Buy Bitcoin and HODL No Matter What. Patience always wins with Bitcoin.