Carlos Velásquez · Medium · 5 min read · Photo by Karolina Grabowska: Pexels

Western media with an axe to grind assess Bitcoin mainly from the perspective of an investor living in a developed country where alternative financial and monetary systems are largely unnecessary. In this context, they paint Bitcoin as just another speculative asset; at worst, the less informed refer to Bitcoin as a Ponzi scheme.

A more nuanced understanding of the value of Bitcoin requires pundits to put themselves in the shoes of less fortunate economic actors around the globe to realize the following: where financial systems are less developed (such as much of Africa), prone to high inflation (Argentina), or unavailable to large segments of society (Vietnam), Bitcoin continues to fulfil its store-of-value function. From a developing world perspective, it’s easier to understand that as long as political and financial instability persists, Bitcoin’s resurgence from the dead should continue.

The 5 Times Bitcoin Died

*This article omits BTC’s November 2013 to January 2016 87% price drop as it was part of a multiyear downtrend caused by several factors: China’s first Bitcoin ban and Mt. Gox’s 2014 hack, ensuing regulatory troubles and eventual bankruptcy.

Bitcoin’s 1st Death: 2011 (99.9% price drop)

In 2011 Bitcoin’s decentralized protocol, anonymity, and fixed monetary supply appealed to its 30,000 or so early adopters. That year, the price of BTC popped from $1 to $32, then crashed to $0.01 when hackers took control of bitcoins on Mt. Gox and dumped them. Publications such as Wire wasted little time before writing Bitcoin-related articles that read like obituaries.

Bitcoin’s 2nd Death: Early 2013 (81% price drop)

In 2013 Bitcoin began attracting mainstream media coverage as interest in Bitcoin grew in Silicon Valley (this was a period when some Greeks and Spaniards began transacting in bitcoins to forgo local foreign exchange rules). With Europe’s ongoing sovereign debt crisis as a backdrop, BTC’s price climbed to $266 in April 2013 but fell to $50 when a second Mt. Gox mishap occurred. Bitcoin detractors again began calling it a tulip bubble.

Bitcoin’s 3rd Death: 2017–2018 (84% price drop)

On December 17, 2017, BTC climbed to a new all-time high of $20,089. But despite a lack of significant events, a gruelling 14-month BTC price downtrend ensued before bottoming at $3,191. The duration of the market correction caused many would-be investors to lose interest in Bitcoin. Some began investing in other cryptocurrencies, such as Ripple and Ethereum.

Bitcoin’s 4th Death: 2020 (55% price drop)

In March 2020, financial markets were down due to the global lockdowns and the economic unknowns of the pandemic. BTC’s price fell over 50% within a few days as investors sold bitcoins to access liquidity, driving the BTC price from $9,032 to $4,107. Naysayers noted Bitcoin was not a good store of value after all; by late 2020, BTC had reached another new all-time high north of $30k.

Bitcoin’s 5th Death: 2021–2022 (77% price drop)

In 2021 BTC’s price surged to an all-time high of $68,789 with the help of global economic stimulus measures and low-interest rates. But the inflationary economic backdrop of 2022 led to a risk-off environment. BTC’s price dropped below $20k even before the FTX investigation; it declined to a 52-week low of $15,657 on November 22, 2022. Despite the renewed FUD, investors who purchased BTC at sub-$5k prices are up at least 4X.

Volatility, Randomness, Stressors

“Out of life’s school of war — what doesn’t kill me, makes me stronger.” ~ Friedrich Nietzsche

Pundits have taken Bitcoin for dead at least five times since its inception, only for it to reemerge with a broader mainstream following. Bitcoin’s protocol continues to thrive in the face of volatility (geopolitical), randomness (economic feedback loops), and stressors (exchange debacles) to which it is exposed. Despite this backdrop — or perhaps because of it — investors should continue to expect Bitcoin’s resurgence from the dead, as has been the case over the past 14 years.

Author also wrote: Mountainous Ambitions | The World’s Richest Man | A $260 Billion Mistake | Wargames Investment Strategy | Fooled By Randomness | Our Airbnb Experiment | Wealth Transfers | 5 Stocks: S&P’s YTD | Inflation Hedges | An 80-Year Life | 13 Rules | N. Taleb’s Minority Rule | Your Inner Voice | Bitcoin’s Volatility | Blockchain Stocks | 50 Investment Lessons | Flywheel Effect | Bitcoin: Mental Framework | Crypto Moonshots | 4 Crypto Stocks | Bitcoin: Insurance | Brief History: Money | Spontaneous Order | Ackman’s $2.6B Moonshot | Fragility Inducing Events | Antifragile: Definition

Disclaimer: Topics covered herein are for informational purposes. Before acting on investment information, consult with a financial professional.