Many bitcoin investors lost a lot of money in that collapse. Some lost fortunes. So are bitcoin prices destined for a collapse every time they approach historical highs, or was 2013 a one time occurrence? First, let’s look at bitcoin historical price chart
in hindsight, the first $1,000 dollar peak was a case of obvious over exuberance. Bitcoin was new, it was hot, money was pouring into it. Bitcoin investors got excited. Too excited. This caused a price surge. As prices started to surge, a lot of people jumped on the bandwagon, hoping to tap into rising prices.
Then, savvy and cautious investors started to realize that the price surge wasn’t due to the fundamental value of bitcoin (at the time), but instead over exuberance. They started selling. As more people started selling, prices began to drop, then more people began to panic, creating a stampede that led to prices eventually collapsing. Those who didn’t get out early enough lost a lot of money.
If prices are surging at unnatural rates, as an investor you need to keep a close watch on markets.