Bitcoin Crash 2021: Remember What Happened Last Time! – The Motley Fool Canada

Bitcoin Crash 2021: Remember What Happened Last Time! – The Motley Fool Canada

The world’s most popular digital currency, bitcoin, was created in January 2009 after a housing market crash. The mysterious creator of bitcoin goes by the pseudonym Satoshi Nakamoto envisioned an alternative to central-bank controlled fiat money. People can exchange real currency for arcade-like tokens that work using a decentralized technology called the blockchain.

The mining of the first or “genesis” bitcoin block (Block 0) was January 3, 2009. When Block 1 was mined on January 9, 2009, bitcoin mining commenced, and the digital currency became a worldwide phenomenon.

Fast forward to 2021, and bitcoin is on a rampage with its price is soaring like crazy. Legendary investor Bill Miller said the higher the price skyrockets, bitcoin becomes less risky. However, the opposite happened in 2017 when bitcoin surged to nearly US$20,000, only to crash soon after.

Cryptocurrency bubble

People still remember the fateful event of December 22, 2017, when bitcoin fell 45% from its peak or all-time high of US$19,783.06 five days prior. The cryptocurrency bubble burst to cause a large-scale sell-off of cryptocurrencies. Bitcoin’s price dropped to below US$11,000.

There are striking similarities to the present-day surge. The price rose to US$32,782.02 on January 3, 2021, then slid 14% to $28.722.76 at one point during trading the next day. As of January 11, 2021, bitcoin trades at US$36,557.54 after posting a new record of US$40,797.61 three days earlier.

Renewed exuberance is alarming

Bitcoin followers are happy with the renewed vitality. They see their precious digital asset as a