Skip to main content
Summaries

Booms, Busts, & Bitcoin: How $BTC Has Found New Highs and Lows Over The Years

By October 27, 2021No Comments

“History never repeats itself, but it does often rhyme.” 

– Mark Twain

This piece will focus solely on past bitcoin price action and is no indication of any thesis, future predictions, nor financial advice. There were many similarities between the infamous 2013 and 2017 bitcoin bubbles, both in magnitude and timeframes.

In the past, generally, whenever bitcoin broke through a previous all time high, it was followed by a 100% rally within approximately sixty days. This has happened six times in history: March 2013 it broke $30 to $260 within 60 days; November 2013 broke $260 to $1,200. In May 2017, it broke $1,200 to $3,000; September 2017 broke $3,000 went to $5,000; October 2017 broke $5k and went to $20k; and December 2020 broke $20k and went to $60k within sixty days. Ever since bitcoin’s inception, it has been a rare and exceptionally profitable opportunity to buy breakouts.

There have been three major macro-tops in bitcoin’s twelve-year life span; the $32 top in June 2011, the $1,200 top in December 2013, and the $20,000 top in December 2017. Following each of those macro tops, was an extended bear market varying in length from one to three years. It is important to note that the drawdown has decreased each cycle over time. For instance, in 2011, we had a 93% crash from $32 (6/8/11) to 2$ (11/18/11). Meanwhile, bitcoin experienced a 86% crash from $1180 (11/30/13) to $180 (1/14/14). And finally, it crashed  84% from $20k (12/17/17) to $3100 (12/16/18). The trend indicates that each bear market has grown in length of time, while the drawdowns have slightly decreased over time. Another notable trend from previous cycles is that we tend to explode sometime around Q4 (for the most part).

Compared to previous cycles, currently there seems to be less negative fundamental reasoning nor regulatory warning signals regarding bitcoin, if anything it’s “brand” has grown stronger with time. An example of this is the recent explosion and approval of bitcoin ETFs, which in the past, crypto natives viewed as the holy grail of mainstream adoption. The future always has been, and will continue to be, highly unpredictable. However, that doesn’t mean one should discount the similarities of previous bitcoin cycles and that there might be some merit to them.

Source: Brave New Coin Bitcoin Liquid Index (BLX)

Disclaimer

 

Zeal Reserve (“GP”) and Zeal Reserve Capital Partners, LP (“IM”) are, respectively, the general partner and investment manager of funds (collectively, “Zeal Reserve”). The GP is not a registered investment adviser with the Securities and Exchange Commission (“SEC”) or any state’s securities commission. The limited partnership interests (the “Interests”) in the Fund are offered under a separate confidential offering memorandum (the “Offering Documents”), have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and are sold for investment only pursuant to an exemption from registration with the SEC and in compliance with any applicable state or other securities laws. Interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Offering Documents. Investors should be aware that they could be required to bear the financial risks of this investment for an indefinite period of time. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Certain information contained on this site may constitute “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “will,” “target,” “should,” “expect,” “attempt,” “anticipate,” “project,” “estimate,” “intend,” “seek,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to the various risks and uncertainties, actual events or results in the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements. The GP is the source for all graphs and charts unless otherwise noted. All graphs and charts are for illustrative purposes only and should not be relied upon for making a decision on whether or not an Investor should invest in the Fund.
This site is only for use by investors that qualify as both an accredited investor as such term is defined under Rule 501(a) of the Securities Act and a qualified client as such term is defined in Rule 205-3(d)(1) under the Investment Advisors Act of 1940, as amended (the “Advisers Act”) and in using this site the user represents and warrants that they are both an accredited investor and a qualified client as defined hereinabove, and will use this site for their own information purposes only. VIRTUAL CURRENCIES AND VIRTUAL CURRENCY DERIVATIVES ARE SPECULATIVE INVESTMENTS WHICH INVOLVE SUBSTANTIAL RISK OF LOSS AND ARE NOT SUITABLE FOR ALL INVESTORS. THERE ARE NO GUARANTEES OF PROFIT. INVESTMENTS IN VIRTUAL CURRENCIES AND VIRTUAL CURRENCY DERIVATIVES CAN RESULT IN INVESTORS LOSING THEIR ENTIRE INVESTMENT.