The total market value of cryptocurrencies has almost been cut in half. How many times in history has this happened?

In recent days, as the crypto market has fallen like a waterfall, the number of BTC losing addresses has reached a 20-month high, and the number of ETH addresses in a loss state (7-day MA) has reached a 17-month high. The total market value of the crypto field has also almost been "halved", falling from a peak of 3 trillion US dollars to 1.62 trillion US dollars, a drop of nearly 50%.

(Bitcoin chart)

Data shows that Bitcoin has fallen by more than 21% this year, more than 41% in the past three months, and more than 27% in the past month. Although the current situation has recovered, with Bitcoin rising to $37,000, the current risk aversion of global capital ahead of the expected rate hike and the expectation of tightening regulatory frameworks around the world remain. Analysts point out that given the uncertainty of the macro economy and regulation, crypto bulls may continue to wait and see.

In fact, the rapid decline of Bitcoin is not uncommon in history. In the more than ten years of development of Bitcoin, there have been many rapid declines.

First time: June 2011

2011 was still a pioneering period for Bitcoin. There were very few Bitcoin trading platforms at that time, and only the bravest traders dared to get involved in Bitcoin trading. This led to the drying up of Bitcoin liquidity at the time, and frequent sharp rises and falls.

In June 2011, Bitcoin rose from around $0.95 to $32, and then plummeted to $2 in November, a drop of 94%, setting a record for the largest drop, which still stands today.

Second time: December 2013

After trading just above $200 a month earlier, prices hit an all-time high of $1,151 on Dec. 3. By Dec. 17, prices had more than halved, when China issued its first cryptocurrency ban, barring banks from touching the asset.

The third time: December 2017

Bitcoin performed well in 2017, with its price rising nearly 20 times to $20,000. However, after reaching its new high, it quickly fell to around $13,000, a drop of 29%.

The situation worsened in February 2018, when it fell below $7,000 and spent the next nine months hovering between $6,000 and $10,000. It was still around $6,000 in early November, but a month later, in December 2018, it was worth less than $3,300. From December 2017 to December 2018, Bitcoin fell 83%.

Fourth time: March 10, 2020

Since the beginning of the pandemic in 2020, investors have hoarded cash and liquid assets, and the stock market crash has led to a sharp drop in Bitcoin. Starting from March 10, Bitcoin fell all the way to March 12. It fell from $7,900 to $3,000. However, the subsequent stimulus plan and the unlimited QE launched by the United States quickly led to the influx of funds into the crypto market, driving Bitcoin all the way to $60,000 in 2021.

Fifth: May 2021

With the series of increases initiated by the massive money injection in 2020, by April 2021, the new generation of ASICs came online, and the income of Bitcoin miners hit a new high. On April 2, the difficulty of Bitcoin mining also hit a record high. The mining market continues to "heat up".

Subsequently, Coinbase, the largest compliant cryptocurrency exchange in the United States, landed on the Nasdaq market. Its listing undoubtedly injected a "boost" into the entire cryptocurrency exchange market. The price of Bitcoin continued to rise.

With China’s withdrawal of mining and regulation of trading in May, as well as the advancement of regulatory policies in various countries, the crypto market has experienced a sharp drop, from over $60,000 to around $30,000.

Sixth: December 2021

After the ProShares Bitcoin Strategy ETF, the first exchange-traded fund in the United States linked to Bitcoin, was launched, Bitcoin continued to rise from October 2021 to November 2021, reaching a high again.

However, with macroeconomic and regulatory uncertainties since December 2021, and expectations of U.S. interest rate hikes, the crypto market has declined again, and as of now, it has almost been halved.

Although the decline this time is nearly 50%, it is still not as bad as the 80%-90% decline in history, and Bitcoin has seen a small rebound today. There are still analysts in the market who are optimistic about the future market.

In a recent interview, Bloomberg senior commodity strategist Mike McGlone said that he believes Bitcoin will evade selling pressure in the coming weeks, and this will be the year that BTC reaches a high six-digit price. He expects the price of Bitcoin to reach $100,000 in the future. One of the important reasons why he believes that Bitcoin may reach this price soon is that the asset is transforming from a purely speculative asset to a store of value, which he believes will make it unique among its cryptocurrency brethren. He mentioned: Bitcoin is in a unique stage, transitioning from a risk-taking to a risk-averse global digital store of value, replacing gold and becoming a global collateral, so I think this will happen this year.

Additionally, ARK Investment Management, a firm led by Cathie Wood, predicts that the price of Bitcoin could exceed $1 million by 2030 as global adoption of cryptocurrencies is still in its early stages. "Bitcoin's market capitalization still represents only a small portion of global assets and is likely to expand as countries adopt it as a legal tender," ARK analyst Yassine Elmandjra wrote in the firm's "Big Ideas 2022" outlook report released on Tuesday. ARK added in its Bitcoin outlook that cryptocurrencies are taking market share as global settlement networks. According to ARK's research, Bitcoin's cumulative transfer volume increased by 463% in 2021, and its annual settlement volume has exceeded Visa's annual payment volume. Technological advances such as the Taproot upgrade and the Lightning Network may also help Bitcoin scale. According to ARK, institutional ownership of Bitcoin will also expand. Cathie Wood previously predicted that Bitcoin will reach $500,000 by 2026.