Bitcoin's crashes in the past have been much more severe than latest rout
Panicking that the bitcoin bubble has finally burst? The popular cryptocurrency actually has a history of survivingcrashes, and in its short life has already been through 13 major corrections or crashes.
That's according to an analysis by data visualization site HowMuch (https://howmuch.net/articles/bitcoin-all-major-crashes), which compiled all of bitcoin's crashes, beginning in 2012, in one chart.
Get more cryptocurrency updates from MarketWatch:Check prices, performance and market capitalization, in one dashboard(https://www.marketwatch.com/graphics/cryptowatch/#/).
The price of bitcoin is trading around $8,000, remaining well below the level of $10,000 seen a week ago and itsDecember peak near $20,000. But this chart could qualm the fears of cryptocurrency investors who wonder if this is theend for cryptocurrencies.
To visualize bitcoin's crash history, HowMuch (https://howmuch.net/articles/bitcoin-all-major-crashes) created 12boxes representing time periods where bitcoin came under extreme selling pressure. The blue line indicates thepercentage of value lost during each selloff. And while this latest selloff could be tough for HODLers (http://www.marketwatch.com/story/are-you-hodling-bitcoin-2017-09-12) who are checking their accounts this week, it's not theworst. Bitcoin lost 87% of its value in the 411 days from Nov. 30, 2013, through Jan. 14, 2015.
It lost 83% of its value in just three days between April 10, 2013, and April 12, 2013. If you had invested just $1,000 in bitcoin at the bottom of that three-day correction at $45, it would be worth about $200,000 today (and wouldhave been worth nearly half a million dollars back in December).
Still, this chart is no guarantee this isn't the end. Joe Davis, Vanguard's global chief economist, this weekproclaimed in a blog post (http://www.marketwatch.com/story/vanguards-chief-economist-decent-probability-that-bitcoin-goes-to-zero-2018-02-08) that there is a decent probability that bitcoin's price goes to zero.
"Unlike stocks and bonds, currencies generate no cash flows such as interest payments or dividends that can explaintheir prices," he wrote, adding that while national currencies derive their prices based on the economic activity oftheir underlying country or region, crypto prices "are generally not based on economic fundamentals."
Meanwhile, the Winklevoss twins are still incredibly bullish on bitcoin (http://www.marketwatch.com/story/winklevoss-if-you-cant-see-bitcoin-at-320000-you-just-lack-imagination-2018-02-07). Cameron Winklevoss told NBC this week that hethinks bitcoin will one day be worth 40 times today's price. The Winklevoss twins are currently No. 4 on the Forbes listof wealthiest players in cryptocurrencies (http://www.marketwatch.com/story/theres-now-an-index-to-track-the-richest-people-in-cryptocurrency-2018-02-07).
-Sally French; 415-439-6400; AskNewswires@dowjones.com