Bitcoin Crashes – A Visual History

Bitcoin suffered it’s latest price plunge this week – at one point pulling back as much as 50% from its all-time high. Below is a great visual of Bitcoin crashes brought to you by Visual Capitalist.

As you can see, crashes like this are certainly nothing new for Bitcoin. In it’s relatively short history it’s experienced many major pullbacks – some much worse than this recent episode.

Bitcoin Crashes - A Visual History

There are many factors contributing to this, including Elon Musk’s recent announcement that Tesla will stop accepting Bitcoin for purchases for now.

If this were a micro-cap stock or some cutting edge bio-tech company with a possible cure for common diseases, you would probably expect crazy volatility and dramatic pullbacks. And don’t get me wrong, I’m not surprised at all that Bitcoin is capable of losing 50%-60% in a couple days. It also doesn’t bother me in the slightest bit, because I accept Bitcoin as an extremely volatile, new investment type.

I think what makes this somewhat unique is that many people look at Bitcoin as a “store of value,” almost like a cash alternative or stable currency. Maybe it will be someday – it’s possible many cryptocurrencies will fall into this category eventually. But, clearly Bitcoin and other digital “currencies” are anything but stable at this point.

I think investors looking to get into the cryptocurrency space just need to go into it with their eyes wide open and realistic expectations. The risk of dramatic losses is real. And putting funds that were allocated as cash savings into crypto may not be a prudent move.

Source: Visual Capitalist

This entry was posted in Blog, Investing, Market Commentary by Mike Minter. Bookmark the permalink.

About Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).   Read Mike's Profile HereRead More Articles by Mike

Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).

Read Mike's Profile HereRead More Articles by Mike

Related Posts