What is the difference between this bear market and that of 2014?

Since the beginning of the new year, most digital currencies have lost more than 60% of their market value in the past three months. The depressed market has begun to bring back memories of the great bear market in 2014, when Bitcoin and many altcoin markets suffered a year-long downturn. Although the current bear market has some similarities with the bear market four years ago, the deep-seated differences in the digital crypto ecosystem make people believe that this pessimism will not last long. In 2014, when Bitcoin was called the "worst currency", it is completely different from now.

The obvious difference between 2014 and now

If you are involved in or hold cryptocurrencies, you may have heard analysts compare the current downturn to the famous 2014 bear market. Starting in January 2014, the price of Bitcoin fell from $864 to about $200 in a year. The mainstream media rated the cryptocurrency as the "worst currency of the year" due to its extremely weak performance relative to sovereign credit currencies. It wasn't until 2015, when Bitcoin mining became unprofitable in some regions, that things began to improve.

Although the price of Bitcoin dropped 60% in a year, many things were different that year. For example, the surge before the 2014 bear market before the Mt Gox bankruptcy was a shorter bull market; the 2017 bull market was different, lasting a full year, with about seven 20-30% downward adjustments during the period.

In 2014, there were a series of exchange thefts that severely affected the market, and the collapse of Mt Gox and Mintpal exchanges left an important mark on the history of digital currency. However, the world is very different now. The Bitfinex hack is a good example. The market was indeed affected briefly after the incident, but the price of Bitcoin quickly resumed its upward trend. The Japanese exchange Coincheck lost more money than Mt Gox in the 2018 theft incident (calculated in US dollars at the time of the incident), but the impact on the market only lasted for a day or two. This means that the overall digital currency market has become more resistant to exchange thefts, and in the two recent incidents, Bitfinex and Coincheck are still operating well.

A wide range of infrastructure and mainstream investment vehicles

Back in 2014, there were not as many brokerage services and trading platforms as there are today. The infrastructure of the digital currency ecosystem today is a far cry from what it was in 2014. There are many exchanges and products that allow investors to easily purchase digital assets, as well as various digital wallets, full node protocols, gateway payment processors, institutional and over-the-counter trading, brokerage platforms, and trading platforms that provide a variety of digital asset services. These various forms of business entities are ensuring that the digital currency market remains vibrant. What is even more different from 2014 is that a large number of traditional investment tools have been added to the digital asset field, such as futures, options, exchange notes, hedge funds, and index funds. These have attracted the attention of mainstream investors and the general public to the emerging digital asset investment.

Mainstream media coverage and general public attention

In 2013 and 2014, the price of Bitcoin and other altcoins did attract mainstream media attention, but all of this attention was mocking the extent of the money lost in this market. However, the situation is different now. During the bull market in 2017, when the price of Bitcoin reached $5,000, the mainstream media began to report on digital currencies in the headlines every week; when the price reached $10,000, the headlines became daily, and well-known media such as Bloomberg, the Wall Street Journal, CNBC, and Time Magazine also joined the report. CNBC, in particular, has invested a lot of energy in publishing information related to digital currencies on its website platform and regular TV program "Fast Money".

There’s never a dull day in the world of Bitcoin

In 2014 and even 2015, not many people knew about Bitcoin and other altcoins. Back in February 2014, the Wall Street Journal reported that 76% of Americans didn’t know what Bitcoin was, or had never even heard of it. 80% of those surveyed said they would ignore digital currencies and would rather invest in gold. By 2017, according to Lend EDU research, 78.5% of U.S. residents had heard of Bitcoin, and 11% owned it. Another recent survey also showed that 88% of residents living in Japan had heard of Bitcoin. When the price of Bitcoin exceeded $10,000, most people had already heard about Bitcoin from multiple sources. The Wall Street Journal’s print edition headline reported the $10,000 Bitcoin milestone, saying, “Even middle-aged women are buying into the market.” Around the world, similarly astonishing statistics have appeared in Venezuela, Brazil, Colombia, Africa, Russia, Sweden, Switzerland, Australia, South Korea, and more.

The “cryptocurrency winter” of late 2017 and 2018 is completely different from the one four years ago. Compared to 2014, when there was no infrastructure, no mainstream investment tools, no media coverage except negative reports, trading platforms were hacked and collapsed without compensation, and no one knew about cryptocurrencies, it seems unlikely that this bear market will last so long.

The past three months have indeed been a very brutal bear market, but pessimism may not last long. As more and more individuals and companies are involved, the possibility of digital currencies continuing to appreciate in the long term relative to fiat currencies after this complex cycle of ups and downs is still very high. In the world of digital currencies, one thing will not change - a boring day will never appear in the field of Bitcoin.