2018 has been a tough year for anyone holding bitcoin, especially for those who only began investing late in 2017. So far there has been no indication that bitcoin is going to recover. In fact, after spending over two months trading in a tight range of $6,300 to $6,500 the world’s most valuable cryptocurrency by market cap dropped further and is now trading below the $5,500 level for the first time since October 2017.
Does that mean bitcoin won’t ever recover? Hardly. To keep perspective over the future of bitcoin price we need to look into the past of bitcoin price.
Bitcoin Price History
Despite the lack of volatility in bitcoin over the past few months we have to remember that bitcoin has always been a volatile asset. Of course the drop from nearly $20,000 to $5,500 in under a year isn’t much fun, but it also isn’t the first time we’ve seen such a large move from bitcoin.
Every time bitcoin has fallen so drastically it’s also recovered and moved to new all-time highs. And there’s no reason to think that this time will be different.
Of course a drop from $19,296 to $5,358 is huge, but it isn’t the largest fall for bitcoin percentage wise. From July 2011 to December 2011 bitcoin fell from $31 to $2; a drop of more than 90%.
Over the course of the following year the price increased from $2 to $13, or more than 600%, however, that was tiny compared to the 13,300% increase as bitcoin surged in the coming months to hit $266 by April 2013. And just two months later the price was back at $70.
There have been other dips that saw bitcoin losing 50% or more of its value in several months, yet each time it has come back stronger than ever. And that gives us little to be concerned about over this current pullback.
When will Bitcoin start moving higher again?
It’s easy to forget the history of bitcoin when you’re living through one of its massive dips. But just a little bit of perspective goes a long way. Bitcoin very recently celebrated its 10th birthday and in those 10 years it went from a value of basically $0 to the current value of $5,500. That’s incredibly bullish in my eyes, no matter what the shorter-term picture looks like.
Consider too that bitcoin’s ecosystem is just now beginning to find a solid footing. Scaling and high transaction fees have been issues, but the Lightening Network promises to solve those problems, leading to great merchant adoption, and greater mainstream adoption. Both of these can only increase the price of Bitcoin.
The combination of technical advances, mainstream adoption, and more interest from institutional investors will pave the way for the next rally in bitcoin. Even if it doesn’t occur in 2019, the coming rally is likely to make $19,000 look like pocket change, if it’s anything like past rallies.
Bear markets can seem to drag on forever, but once we emerge into a new bull market those who kept faith are likely to be rewarded very generously.