Why the Crypto Collapse Matters
Crypto’s been in a lot of trouble lately. The market has been on a downward trajectory for much of 2018 and 2019. Even during the year when the bull market was at its peak, the markets still were struggling to stay above the 200-day average.
In mid-December, the market collapsed with a loss of over 40 percent of its value, causing the world’s largest crypto market to drop to nearly 30 percent less than its high mark. The crash was the worst since the market’s infancy, and it led to a major market correction, the largest in crypto history. The bear market is over now, but the correction could continue for months as the market remains in a downward spiral. The reason for these current difficulties is that most of the top 10 coins in the market are underperforming—even among the top 10 coins by market capitalization.
The market’s current bear market is not as bad as the ones following in the late 2000s and early 2010s. In 2011, at the height of the Dotcom crash and the Great Recession, the market collapsed by nearly 60 percent and lost the equivalent of $200 billion worth of value. The market was trading over 10 percent less that year.
In October 2017, Facebook went public and crypto prices dropped precipitously, making it the worst market crash of the decade. During the crash, the market was down by over 40 percent, meaning that a $100 investment in the U.S. market would have only grown by $40 instead of $80. The world’s largest market made the largest plunge ever seen for a single technology company.
This was followed by a bear market in 2018 which saw crypto prices plunge nearly 85 percent. During this period, Bitcoin fell from $20,000 to $11,000 and $0.9, representing a nearly 30 percent fall, which is the largest ever