Crypto Bear Market: Is This Time Different?

• Bitcoin has experienced many bear markets before, but this time it feels different.
• Head of Research cautions against naive extrapolation of past returns.
• Stock markets have been on a bull run since Bitcoin’s inception and sample size of Bitcoin trading is still small.

No, Bitcoin Has Never Seen a Bear Market Before – This Time It’s Different

The Volatility of Bitcoin

Bitcoin is known for its volatility; prices can skyrocket and then crash just as quickly. A quick look at a chart of its price history shows the dramatic highs and lows that are typical for the cryptocurrency. While these wild swings may be something investors have experienced before, there are reasons to suggest that this bear market is different from previous ones.

Caution Against Naive Extrapolation

Dan Ashmore, our Head of Research, cautions against assuming that past performance will be repeated in the future. Despite the recent surge in prices over the past six months, Bitcoin is still 60% lower than its all-time high in Q4 2021. This means many investors who opened positions during the last three years remain underwater on their investments.

Long Bull Run Since Bitcoin’s Inception

Until now, stock markets had done nothing but increase since Bitcoin was launched in 2009. The bull run that followed was one of the longest in history and needs to be taken into account when considering the current situation with cryptocurrency trading. Additionally, sample size for such trades remains relatively small compared to other assets like stocks or bonds due to BTC’s short lifespan as an asset class.


In conclusion, while it is possible for bitcoin prices to rise again as they have done previously after a pullback or bear market, it would be unwise to assume this will happen without considering changing conditions and taking into account new factors like market sentiment and geopolitical events which may affect price movements going forward.

Key Takeaways

• Bitcoin has been through many bear markets before, always surging back to higher highs • Dan Ashmore cautions against naive extrapolation of past returns • Until this past year, stock markets had done nothing but rise during Bitcoin’s existence • Bitcoin was launched in 2009 as the stock markets bottomed • Sample size of Bitcoin trading with any sort of liquidity is also small