Turbulence. This is a phenomenon that goes hand in hand with any market. It is not unusual or contemporary. A well-experienced trader knows turbulence is typical. It happened numerous times before such as during the dot-com bubble burst, the Mt Gox scandal, and the 309 deaths experienced by Bitcoin.
The current state of the cryptocurrency market has seen a decline of 80 percent from its January market peak. It is comparable to the dot-com bubble burst that happened from 1995 until 2000. In this period, Amazon’s price per stock fell from $100 to $10. Approximately $1.8 trillion market cap was lost during the tech market crash.
Fast forward to today, Amazon’s stock price has increased to almost $2,000 and a considerable number of companies outlasted the bubble burst.
In 2013 until 2014, the cryptocurrency market has encountered the Mt Gox scandal. $409 million worth of Bitcoin went missing. When news of this broke, the market went down. But in 2017 Bitcoin’s price peaked at $20,000.
Then there is the US dollar. Since the founding of the Federal Reserve, the US dollar has lost 97% of its value. Unlike Bitcoin or Gold, the dollar, as with fiat currencies, is not backed by anything. Bitcoin and gold has similarities in a way that both only have limited supply available, and their difference is one is physical and the other exists in the form of complex mathematical equations.
The dot-com bubble and burst, the Mt Gox scandal, and the current protracted bear market. All these are just a fragment of market crashes and resurrections that happened throughout fiscal history. Turbulence is normall; it results in stabilization in the long run.