Invest
From record rise to bear market: Why investors shouldn’t fear bitcoin’s sudden fall
Invest
From record rise to bear market: Why investors shouldn’t fear bitcoin’s sudden fall
Following a price surge to a new all-time high on Friday, bitcoin crashed nearly 20 per cent over a period of three days and found itself in a “bear market”.

From record rise to bear market: Why investors shouldn’t fear bitcoin’s sudden fall
Following a price surge to a new all-time high on Friday, bitcoin crashed nearly 20 per cent over a period of three days and found itself in a “bear market”.

Bitcoin took 11 years to steadily climb to US$20,000 a coin in 2017, before adding a further US$20,000 in a matter of days. But, following its rapid rise to a new high of US$42,000 ($54,000), the growth trend was cut short and the price of the world’s favourite cryptocurrency came crushing down 20 per cent to $US30,000 ($38,900) in a matter of days.
In investment terms, a fall of 20 per cent or more is a bear market, with bitcoin technically landing in one just days after it was celebrated for reaching a record high.
Despite the three-day fall being the biggest slide since the pandemic began, investors who purchased bitcoin 12 months ago still pocketed a 1,000 per cent return on the speculative asset class.
Apollo Capital’s co-founder and CIO, Henrik Andersson, was not surprised by the sudden pullback.
“At some point we will see pullbacks, that is natural in any market,” he told investors.
His colleague, Apollo Capital’s managing director, Tim Johnston, believes the timing of the recent pullback is not unusual following such strong gains.
“It’s very hard to explain the drivers of bitcoin’s price movements. One suggestion is investors taking some profits after such strong gains. Another suggestion is momentum traders and leverage exacerbating movements, both on the upside and downside,” Mr Johnston said.
He highlighted the latest pullback was normal for such a new asset class, opining that long-term bullish investors shouldn’t worry about a 20 per cent decline.
“No, and indeed it if does, bitcoin is probably not for them. Bitcoin is very volatile.
“Investors need to be prepared for this volatility, and if the thought of dramatic price swings scares them, they are probably better placed investing elsewhere. We like to think the volatility creates opportunities,” Mr Johnston concluded.
About the author

About the author


Bitcoin
Crypto crumbles after momentous day
The prices of cryptocurrencies have slumped dramatically over the last few days following a momentous day causing record highs. ...Read more

Bitcoin
Bitcoin price jumps, but how high can it go?
A reduction in supply and an increased demand from new types of investors have continued to push the price of bitcoin higher over the weekend, with a leading analyst now predicting that the price coul...Read more

Bitcoin
You can now buy a Tesla with bitcoin
Tesla customers can now purchase one of its electric vehicles with bitcoin, the company’s website and the CEO’s post on Twitter have confirmed. ...Read more

Bitcoin
India to propose cryptocurrency ban
The price of bitcoin fell from its recent weekend highs as one of its largest potential markets, India, proposed strict new rules banning the digital asset. ...Read more

Bitcoin
Bitcoin’s latest surge fuels fresh demand for regulation
With the world’s largest cryptocurrency setting a new record over the weekend, there are renewed calls to regulate the digital asset and hold it in the same standard as the rest of the financial sy...Read more

Bitcoin
Inflation, stimulus cheques drive bitcoin to all-time highs
The world’s largest cryptocurrency briefly crossed a record high of US$60,000 ($77,329) over the weekend, as stimulus cheques and fears of inflation continue to drive up the price of the digital hed...Read more

Bitcoin
Crypto miners rake in $1.3bn in February alone
Bitcoin’s price rally since the start of 2021 has turned into a record year for crypto miners, new research has revealed. ...Read more

Bitcoin
Boomers embrace crypto craze
As crypto currencies continue strong growth in 2021, older investors are looking to cash in, new research has revealed. ...Read more

Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now

Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now

Raging floods, the tech stock bubble and the ongoing SG debate
Listen now

Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now

Bitcoin
Crypto crumbles after momentous day
The prices of cryptocurrencies have slumped dramatically over the last few days following a momentous day causing record highs. ...Read more

Bitcoin
Bitcoin price jumps, but how high can it go?
A reduction in supply and an increased demand from new types of investors have continued to push the price of bitcoin higher over the weekend, with a leading analyst now predicting that the price coul...Read more

Bitcoin
You can now buy a Tesla with bitcoin
Tesla customers can now purchase one of its electric vehicles with bitcoin, the company’s website and the CEO’s post on Twitter have confirmed. ...Read more

Bitcoin
India to propose cryptocurrency ban
The price of bitcoin fell from its recent weekend highs as one of its largest potential markets, India, proposed strict new rules banning the digital asset. ...Read more

Bitcoin
Bitcoin’s latest surge fuels fresh demand for regulation
With the world’s largest cryptocurrency setting a new record over the weekend, there are renewed calls to regulate the digital asset and hold it in the same standard as the rest of the financial sy...Read more

Bitcoin
Inflation, stimulus cheques drive bitcoin to all-time highs
The world’s largest cryptocurrency briefly crossed a record high of US$60,000 ($77,329) over the weekend, as stimulus cheques and fears of inflation continue to drive up the price of the digital hed...Read more

Bitcoin
Crypto miners rake in $1.3bn in February alone
Bitcoin’s price rally since the start of 2021 has turned into a record year for crypto miners, new research has revealed. ...Read more

Bitcoin
Boomers embrace crypto craze
As crypto currencies continue strong growth in 2021, older investors are looking to cash in, new research has revealed. ...Read more