The Covid Crash: Four Years Later, Bitcoin Soars to New Heights
Four years ago, the world was grappling with the devastating effects of the Covid-19 pandemic. While the virus wreaked havoc on lives and economies, it also had a profound impact on the cryptocurrency market, particularly Bitcoin. At that time, Bitcoin experienced a significant slump, leading many skeptics to dismiss it as a viable alternative asset. However, history has proven them wrong.
What Happened Back Then?
Prior to the Covid-19 pandemic, the cryptocurrency market was already facing challenges as it tried to recover from the 2018 bear cycle. Although there were some positive price movements in 2019, with Bitcoin briefly surpassing $10,000, the overall market was still struggling.
However, optimism was on the horizon due to the upcoming third halving event in May. Permabulls were hyping up the crowd with predictions of price increases. But then news of a mysterious virus originating from China started to emerge.
As Covid-19 spread rapidly and reached Europe and the US in early 2020, the World Health Organization declared it a global pandemic. The immediate reaction in the financial markets was a sharp decline in Bitcoin and other risky assets. Bitcoin plummeted by 50% to $4,000 within a short period of time.
The Recovery
Despite skeptics like Peter Schiff declaring Bitcoin โdead,โ the cryptocurrency didnโt go down without a fight. It began its recovery almost immediately after the crash and quickly bounced back to over $10,000 by May. The third halving event further fueled its rise, and Bitcoin continued to gain traction throughout 2020.
By the end of the year, Bitcoin had reached around $20,000. In the following months, its price surged even higher, reaching over $60,000 by April 2021. Although there were some retracements along the way, Bitcoin set a new all-time high of $69,000 in October and November of that year.
In 2022, Bitcoin faced challenges such as industry bankruptcies, scams, global inflation, and geopolitical conflicts. However, even during its lowest point (around $16,000), its price was still four times higher than after the Covid-induced crash.
Fast forward to March 2024, and Bitcoin has reached a new all-time high of over $73,000. In just four years, its valuation against the dollar has soared by more than 1,700%. This remarkable growth proves that Bitcoin is far from being a โdeadโ asset.
What Else Changed?
The past four years have brought significant developments and milestones for Bitcoin:
- Recognition by legendary legacy investors: Shortly after the crash in 2020, Bitcoin gained recognition from prominent investors like Stan Druckenmiller and Paul Tudor Jones III.
- Adoption by MicroStrategy: Wall Street giant MicroStrategy became one of Bitcoinโs biggest supporters. The company purchased massive amounts of Bitcoin and now holds 205,000 BTC worth around $14 billion.
- Regulatory approvals: In 2021, the US Securities and Exchange Commission approved the first futures ETFs tracking Bitcoinโs performance. Additionally, El Salvador became the first country to adopt Bitcoin as a legal tender.
- Spot BTC ETFs approval: January 2024 marked another milestone for Bitcoin with the approval of spot BTC ETFs in the United States.
- Growing support from doubters: Over the past four years, Bitcoin has managed to win over many skeptics who have now become supporters.
These achievements, along with Bitcoinโs incredible price surge, demonstrate its resilience and growing acceptance in the mainstream financial world. Despite the ups and downs, Bitcoin has come a long way since the Covid crash, and its future looks promising.
Hot Take: Bitcoinโs Journey Continues
Looking back at the Covid-induced crash four years ago, it is clear that it was just a minor glitch in Bitcoinโs overall trajectory. The cryptocurrency has proven its ability to recover and thrive, defying skeptics along the way.
As Bitcoin reaches new all-time highs and gains recognition from institutional investors and governments, its position as a prominent asset in the financial landscape is becoming more solidified. With continued developments and advancements in the crypto space, Bitcoinโs journey is far from over.
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content.