Bitcoin Myths · #4 of 20
The Myth
Bitcoin is just a speculative bubble.
Reality check
Bitcoin has crashed four times. It has never stayed down.
Speculative bubbles collapse and stay collapsed. Tulip mania, the Mississippi Company, dot-com stocks, none recovered. Bitcoin has crashed more than 75% four times since 2011 and reached new all-time highs after every single one.
0%
worst crash on record (2011)
And it still came back.
Bitcoin’s 2011 crash was the most severe on record, down 93% from peak to trough. The network kept processing transactions through the entire drawdown. A new all-time high arrived approximately 13 months later. Every crash since has been less severe, and every recovery has followed.4×
Crashes over 75% since 2011
Bitcoin has reached a new all-time high after every single one. None were permanent.
-77%
Most recent crash (2021-22)
The mildest of the four. A new all-time high arrived in March 2024, approximately 28 months after the peak.
15 yrs
Dot-com Nasdaq recovery time
And most individual companies in the index never came back at all. Bitcoin has recovered four times.
Crash depth and outcome, historical bubbles vs. Bitcoin
Tulip mania (1637)
-99% · never recovered
Mississippi Co. (1720)
-99% · never recovered
Dot-com Nasdaq (2000)
-78% · 15 yrs to recover
Bitcoin (avg of 4 crashes)
-85% avg · all recovered
Worth knowing
During the 2021 to 2022 price crash, Bitcoin’s hash rate (the total computing power securing the network) reached new all-time highs while the price was still down more than 50%. Infrastructure investment and speculation were moving in opposite directions. Assets with nothing underneath them do not behave this way.