Memories of the last crypto winter—a term that refers to a sharp slump—are renewing fears a repeat is currently playing out. Back then, Bitcoin’s price plunged by more than 80% to as low as $3,100 in 2018, and it took more than a year for it to reach another high in December 2020.
More recently, Bitcoin has dipped as low as $33,000 from almost $69,000 in less than three months amid a broader selloff in risk assets on growing conviction the Federal Reserve will ratchet back its ultra-accommodative policy settings.
The plunge has hit all corners of the crypto ecosystem, from Bitcoin and memecoins to publicly-listed crypto exchanges, with more than $1 trillion in market value erased from the market.
But for context on how severe past downdrafts have been, consider this: The current Bitcoin selloff is “downright modest” when compared to the 90% drops in value from earlier in its history, according to Bespoke Investment Group. A 90% peak-trough drop in the coin’s price would take it down to around $7,000.
—With assistance from Olga Kharif.
This article was provided by Bloomberg News.