- After rocketing to all-time highs over the past month, Bitcoin had its first major pullback.
- The media is already coming out calling this a bear market, and bears are calling it a bubble.
- It’s a familiar script that’s been repeated in the cryptosphere ad nauseam. Is now the time to believe it?
Bitcoin plummeted. If you’ve been in the crypto market for even as little as one year, you know that’s business as usual.
Bitcoin shoots up, then it drops. Then it usually shoots up again, then it drops. The naysayers come out in chorus with each dip, saying it’s a bubble, a crash, and a terrible investment.
If you’re new to the crypto game, get used to this refrain.
Bitcoin Loses 20% of Its Value (Again)
It’s been a volatile week in the world, and the world of cryptocurrency. According to CoinMarketCap, the flagship cryptocurrency has gone from an all-time high of over $41,000 to under $31,000 in a span of four days.
The monthly chart? It doesn’t look a whole lot better:
As defined by Investopedia, a bear market occurs when a market declines by 20% or more. This decline is usually accompanied by “widespread pessimism and negative investor sentiment.”
Bitcoin has recently lost 20% of its value. And there is no shortage of Bitcoin naysayers, even when the asset is skyrocketing. So when CNN says the asset is in a bear market, it’s technically not wrong.
But if you’re not new to Bitcoin or the crypto market, you know this feels like a wild statement.
After all, Bitcoin lost nearly 20% of its value several times during this bull run.
At the beginning of September, it dropped from $12k to $10k in less than a week.
On November 24th, 2020, Bitcoin went from roughly $19,200 to roughly $16,700 in a span of two days.
Three days after that, it topped its previous all-time high. And now it’s worth over $35,000, and the media is calling it a bear market.
Is This Really a Bear Market?
As we said, there are plenty of people ready to demonize Bitcoin at every chance they get. When it’s experiencing a steep dip, that’s usually when they get the loudest.
Long-time Bitcoin cynic Peter Schiff took to Twitter to feed the flames:
Michael Harnett, the chief investment strategist at Bank of America Securities, said Bitcoin appears to be “the mother of all bubbles.”
Really, Michael? I thought the mother of all bubbles was in 2017, back when The Atlantic called Bitcoin “the most obvious bubble ever.”
In June 2020, Peter Schiff said everyone holding Bitcoin should’ve sold it during the height of that ‘bubble’ because Bitcoin “won’t even come close” to an all-time high in 2020. It shattered its all-time high in December 2020.
I would try to throw shade on the cryptocurrency if I, too, were as wrong as Peter Schiff.
While the recent charts might look precarious, let’s pull back and look at where we’re at in the long run.
2017 may have been a bubble, but there haven’t been too many bubbles in history that popped, then reinflated, then ballooned past the previous highs.
And there haven’t been too many ‘bear markets’ that aren’t even visible within a massive bull market.
What the Others Are Saying
Crypto vets all across Twitter are laughing at CNN’s assertion. They’ve been through it, and they know that we aren’t yet in a real crypto bear market.
No one is denying the volatility of Bitcoin and cryptocurrencies. But it’s precisely because of this volatility that we can’t just start saying that Bitcoin is in a ‘bear market.’
If it keeps dropping below its 2017 highs, then maybe we can start the bear talk. But until that happens, let’s call this what it is: a dip, a pullback, and a correction. Anything more than that is hyperbole.
Disclaimer: The opinions in this article do not necessarily reflect the views of CCN.com.