The Bitcoin Crash of 2021 Compared to Past Sell-Offs
Connect with us

Datastream

The Bitcoin Crash of 2021 Compared to Past Sell-Offs

Published

on

Bitcoin historical corrections from all time highs

Can I share this graphic?
Yes. Visualizations are free to share and post in their original form across the web—even for publishers. Please link back to this page and attribute Visual Capitalist.
When do I need a license?
Licenses are required for some commercial uses, translations, or layout modifications. You can even whitelabel our visualizations. Explore your options.
Interested in this piece?
Click here to license this visualization.

The Briefing

  • Bitcoin had its latest price correction, pulling back more than 50% from its all-time highs
  • Elon Musk’s tweet announcing Tesla’s suspension of bitcoin purchases accelerated the price drop

Bitcoin’s Latest Crash: Not the First, Not the Last

While bitcoin has been one of the world’s best performing assets over the past 10 years, the cryptocurrency has had its fair share of volatility and price corrections.

Using data from CoinMarketCap, this graphic looks at bitcoin’s historical price corrections from all-time highs.

With bitcoin already down ~15% from its all-time high, Elon Musk’s tweet announcing Tesla would stop accepting bitcoin for purchases helped send the cryptocurrency down more than 50% from the top, dipping into the $30,000 price area.

“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
@Elonmusk

Crypto Cycle Top or Bull Run Pullback?

It’s far too early to draw any conclusions from bitcoin’s latest drop despite 30-40% pullbacks being common pit stops across bitcoin’s various bull runs.

While this drop fell a bit more from high to low than the usual bull run pullback, bitcoin’s price has since recovered and is hovering around $39,000, about a 40% drop from the top.

Whether or not this is the beginning of a new downtrend or the ultimate dip-buying opportunity, there has been a clear change in sentiment (and price) after Elon Musk tweeted about bitcoin’s sustainability concerns.

The Decoupling: Blockchain, not Bitcoin

Bitcoin and its energy intensive consensus protocol “proof-of-work” has come under scrutiny for the 129 terawatt-hours it consumes annually for its network functions.

Some other cryptocurrencies already use less energy-intensive consensus protocols, like Cardano’s proof-of-stake, Solana’s proof-of-history, or Nyzo’s proof-of-diversity. With the second largest cryptocurrency, Ethereum, also preparing to shift away from proof-of-work to proof-of-stake, this latest bitcoin drop could mark a potential decoupling in the cryptocurrency market.

In just the past two months, bitcoin’s dominance in the crypto ecosystem has fallen from over 70% to 43%.

DateBitcoin DominanceEthereum DominanceOther Cryptocurrency
End of 202070.98%11.09%17.93%
January63.09%15.39%21.52%
February61.73%11.96%26.31%
March60.19%12.14%27.67%
April50.18%14.92%34.90%
May43.25%18.59%38.16%

Source: TradingView

While the decoupling narrative has grown alongside Ethereum’s popularity as it powers NFTs and decentralized finance applications, it’s worth noting that the last time bitcoin suffered such a steep drop in dominance was the crypto market’s last cycle top in early 2018.

For now, the entire crypto market has pulled back, with the total cryptocurrency space’s market cap going from a high of $2.56T to today’s $1.76T (a 30% decline).

While the panic selling seems to have finished, the next few weeks will define whether this was just another dip to buy, or the beginning of a steeper decline.

»Like this? Here’s another article you might enjoy: Why the Market is Thinking about Bitcoin Differently

Where does this data come from?

Source: CoinMarketCap
Details: CoinMarketCap uses a volume weighted average of bitcoin’s market pair prices.

Subscribe to Visual Capitalist
Click for Comments

Datastream

Super-Sized Bets for Football’s Big Game (2013-2022)

Expanding legalization has driven an increase in bets on football’s big game, with wagers more than doubling from 2021 to 2022. (Sponsored Content)

Published

on

Dollar value of bets for football's big game shown over the last ten years using footballs. The football is much bigger in 2022 to indicate that bets doubled from 2021 to 2022.

The Briefing

  • Sports betting became legal outside Nevada when the federal ban was lifted in 2018.
  • Legalization contributed to betting growth, with wagers on football’s big game increasing ten-fold over the last decade.

Super-Sized Bets for Football’s Big Game

With 99 million viewers in 2022, “more Americans tune in to the Super Bowl than any other television broadcast.” Its large viewership, combined with expanding legislation, has led to ballooning wagers.

In this graphic sponsored by Roundhill Investments, we show how these bets have grown over the last 10 years.

Annual Legal Bets on the Big Game

From 2013 through 2018, sports betting was only legal in Nevada and year-over-year growth was low. However, when the federal sports betting ban was lifted in May 2018, more states started allowing bets.

By 2022, 33 states plus Washington, DC were legally able to bet on the game. Wagers climbed quickly as a result.

YearTotal BetsAnnual Growth
2013$99M5%
2014$119M21%
2015$116M-3%
2016$133M14%
2017$138M4%
2018$159M15%
2019$191M20%
2020$280M47%
2021$486M73%
2022$1.1B119%

Data only for states that report bets on football’s big game, see graphic for full list of states included in 2022.

Impressively, legal bets surpassed the $1 billion mark in 2022. Growth was primarily driven by New York State legalizing online sports betting, with the state contributing nearly $500 million to the total.

Since the New York State Gaming Commission does not report event-specific totals, we have estimated this amount based on sports bets made the week leading up to and including the date of the big game.

Investment Exposure to an Emerging Industry

Due to legalization, bets on football’s big game have grown 10 times larger over the last decade. A further shift away from bookies and toward legal operators appears to be likely. In September 2022, 89% of Americans said it was important to bet with a legal operator this NFL season, up from 76% in February 2022.

For legal operators, this could translate into revenue opportunities. Companies that take legal bets reported more than $62 million in revenue from the big game alone in 2022, a 37% jump from the prior year.

Looking for exposure to the growing sports betting industry? Explore Roundhill’s sports betting ETF, $BETZ.

Continue Reading

Subscribe

Popular