Bitcoin; fool me once shame on you. Fool me twice, shame on me.
You have likely heard a version of that famous phrase at some point during your life. However, as time goes by it is becoming more and more applicable to Bitcoin. For example, let’s go back in time to 2019. We were still fresh off of the blow-off-the-top moment that concluded the bull market in 2018. Bitcoin was much less proven than it is today and there were real concerns that the death blow had finally been dealt to this market. People weren’t assuming that the market would recover like they are today.
With that said, as we progress through 2019 the market began to recover. All of a sudden Bitcoin soared back over $10k and hope was reignited in the market. Bitcoin was hungry for more and didn’t stop there, rocketing up above $13k. That is when people began to talk about us being in a bull market, that Bitcoin was officially back, and were even discussing how high the price would go. Since it reached a price of $20k in 2017, now we had our sights set on $50k, $100k, and beyond. Prices had begun to recover just enough to cause people to forget how painful the year before was, and how you should never assume anything with Bitcoin. Coincidently it was also a year before the next Bitcoin halving.
Sound familiar?
That is the exact same formula that has been playing out this year.
We are only a year removed from arguably the most painful period in Bitcoin and crypto history. However, the market began to recover. Along the way a few bullish announcements were made, specifically BlackRock’s spot ETF application, and Bitcoin jolted up to $31k. Hype returned to the market, and people were claiming Bitcoin was back. That it was only a matter of time until the ETF was approved, and it would be the catalyst that sends Bitcoin above $100k.
This could all be true. But oddly enough in the summer right before the next halving the price of Bitcoin tanked once again, causing people to lose confidence in the market once again.
It happening once in 2019 would be a nice coincidence. But now that it has happened twice, it has become a trend. With that said, in 2023 we are the lucky ones. Time and history is our friend.
As I mentioned above, Bitcoin was much less established during the last cycle. Many people hoped that it would recover someday, but there was a lot less history to hang your hope on. Fast-forwarding to 2023, we have seen this story play out time and time again. Bitcoin soars up to incredible heights, only to be brought down by FUD, or a parabolic blow-off-the-top moment. In the past, we had no idea if it would recover or not. To be honest, we still don’t. But with each day that Bitcoin is alive and producing blocks, the odds of that happening improve. Each cycle that Bitcoin survives through also improves those odds.
In 2019, after the price of BTC tanked there were countless amounts of people who lost conviction and sold out of their positions. They just couldn’t handle more pain in this market. Little did they know that Bitcoin would soon soar up to $69k during the next cycle.
The same situation is playing out today. People were ready for the bull market to begin. Hyped about the BlackRock news, and the upcoming halving. Only for air to be let out of the balloon.
However, we all know how this situation will play out next cycle. Don’t let Bitcoin fool you.
How about you? Has Bitcoin ever fooled you
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As always, thank you for reading!