Bitcoin (BTC 3.36%), the world's most valuable cryptocurrency, has risen roughly 13,600% over the past 10 years. But it also experienced some wild swings during that decade, as the market endured a recession and three major crypto winters.
As of this writing, Bitcoin still trades about 40% below its record high of $126,000 from last October. Should you buy it at these levels, or wait for the next market crash?
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How volatile was Bitcoin?
Bitcoin reached $20,000 in 2017, but it sank as low as $3,200 during the crypto crash of 2018-2020. It traded between $3,800 and $69,000 during the 2020-2021 cycle, and between $15,500 and $31,000 during the 2022-2023 crypto winter.
For its current cycle, it's traded between $38,500 and $126,000. Those steep declines shook out many of its investors, but those who held on were rewarded with bigger gains each time.
CRYPTO: BTC
Key Data Points
Three catalysts fueled Bitcoin's long-term appreciation. First, it became harder to mine with each halving, which halved its mining rewards every four years. Second, it attracted more attention from retail and institutional investors after the approval of its first spot price ETFs. Lastly, expansionary monetary policies drove more investors to see Bitcoin as "digital gold" and accumulate it as a hedge against the devaluation of fiat currencies.
More than 20 million of Bitcoin's 21 million maximum supply has already been mined. That scarcity also makes it more similar to gold and silver than other cryptocurrencies.
However, several challenges also kept Bitcoin volatile. Regulatory headwinds, the failures of several high-profile exchanges and tokens, and higher interest rates all periodically drove investors away from cryptocurrencies toward more conservative investments. Therefore, Bitcoin was still considered a speculative investment rather than a safe haven.
Where will Bitcoin be after the next market crash?
Bitcoin is still pulling back from its record high from last October, and it could sink even lower before it bottoms out. A broader stock market crash, which could easily occur given the S&P 500's historically high valuations, would exacerbate that decline. Therefore, I wouldn't be surprised if Bitcoin revisited its 52-week low of about $60,000 during the next big crash.
However, Bitcoin's trading history suggests it will bounce back and soar even higher during the next crypto summer. So if you're the kind of investor who can tune out the near-term noise and stomach a lot of volatility, it might be smart to accumulate more Bitcoin this year.
