You have heard all of the stories about Bitcoin. That it is on the brink of being the next big thing to completely take over the financial world. That it will cause the greatest transfer of wealth the world has ever seen, and those who have invested will be able to reap the rewards. We have all heard the predictions about its price eventually reaching $1 million per coin, and that only is the beginning.
However, there is no denying that it has been a rough few years for Bitcoin since 2017. Back then it reached an all-time high of $20k, but there have been many hills and valleys since then. Eventually skyrocketing up to $69k, before dropping down to $15k, and now bouncing back up to nearly $27k. Bitcoin’s price is only $7k higher than it was six years ago. Even with all of the recent financial market volatility, you would have seen higher gains during that time by simply investing in the S&P 500. This is a fact that will stun most cryptocurrency investors.
Bitcoin and crypto have always been thought of as incredibly volatile and risky markets. But the volatility was worth it in the past because o your coins long enough, you saw gains that far surpassed any other market. That volatility remained last cycle, as we went on a price rollercoaster ride up and down. This was expected and nothing new.
However, there were two problems that made Bitcoin’s price action a disappointment last cycle.
1. Bitcoin’s price didn’t go as high as expected
The first disappointment was that the price of Bitcoin didn’t go nearly as high as most were expecting. When the bull run was beginning, all of the top financial experts were making Bitcoin price predictions. It was extremely common to see predictions declaring that BTC’s price would reach $200k, $300k, $500k, or even $1 million per coin. Talk of a Bitcoin super cycle become one of the most discussed topics.
The people who were ultra-conservative or even bearish were even predicting that Bitcoin would reach $100k. However, as we now know, BTC didn’t even reach that market. While $69k is an incredible feat, there is no denying that it is nowhere near the price predictions that were being made.
Most people in the cryptocurrency market have concluded that Bitcoin’s wings were clipped while it was on the verge of soaring to incredible heights. That the lofty predictions might have been reached, if this had just been a normal cycle. But, it was nowhere near normal. There was more FUD threw toward Bitcoin’s direction than in any crypto cycle. Each time Bitcoin began soaring, there was FUD that brought it down. It stood back up and began soaring again only to be brought back down by more FUD. Bitcoin dealt with covid, inflation, raising interest rates, war breaking out, regulations, being banned in China, ESG FUD, and the list goes on. With everything that Bitcoin went through, it's extraordinary that it was even able to reach $69k. With that said, we are left with questions of “What if? and What could have been?
2. Bitcoin’s Price Dropped Much Lower Than Expected
If Bitcoin’s price didn’t go as high as expected during the bull market that would be one thing, but it also dropped much further than any of us ever could have imagined. It broke the sacred theory that the price will never drop below the previous cycle’s all-time high. But, it went all the way down to $15k.
Once again, Bitcoin had to deal with unprecedented circumstances. No one saw the summer of crypto insolvencies happening, and definitely, no one was predicting FTX’s fraud. I like to call 2022 the year of self-inflicted wounds in the cryptocurrency market. If none of those events had taken place, we likely could have seen Bitcoin’s price bottom out near $30k. That would have been a much easier pill to swallow.
Considering both factors, most would Bitcoin was a disappointment in terms of price last cycle. But that doesn’t mean that will continue to be the case in the future. If there is one thing that you need to know about Bitcoin, it is that you should never underestimate it. Its price goes up higher and faster than most can imagine, but it also drops at an even faster velocity. Many in the Bitcoin space are theorizing that Bitcoin will soar even higher during the next cycle due to its flight being shortened last year. No one knows what it will do, including me. With that said it will be exciting to see what happens.
How about you? Was Bitcoin a disappointment last cycle?
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