March 12, 2020 is regarded as a watershed in the history of Bitcoin (BTC). On that date, at the height of the pandemic, the price of the cryptocurrency dropped from $6,000 to nearly $3,200. Known as Coronacrash, the 50% loss in a few hours was one of the biggest in BTC history and came to question the view of cryptocurrency as a store of value. However, the long-term price proved resilient and bounced back. According to CoinMarketCap, the cryptocurrency has gained 1,208% from its current value ($38,664). But other things have also changed both in the BTC market and network. Check out what has evolved the most in the last two years.
What happened in 2020?
Contrary to what is known today, the beginning of 2020 was quite optimistic, especially for the cryptocurrency sector. On January 1, BTC was quoted at $7,000, but the price jumped 30% over the next six weeks, reaching $10,000 in March. Along with BTC, other markets also recorded strong valuations. The S&P 500 stock index, for example, reached an all-time high in March. With the market going this way, most investors were quite optimistic. However, a threat began to emerge from the Wuhan region of China. It was in that period that the then new coronavirus caused its first deaths. The Chinese government decreed a lockdown and closed the region in January, but the virus eventually spread. As a result, the virus began to spread to other countries in the region and eventually reached the West. In March, the World Health Organization (WHO) declared the virus a pandemic. After the declaration, the uptrend of the markets quickly reversed. Stock markets fell sharply, with circuit breakers being triggered in both the US and Brazil. Then came the 12th of March. On that day, BTC was trading at around $8,000, but the price collapsed in a matter of hours. The drop was more than 50% and brought the price down to close to $3,200 on the same day. Ether (ETH) dropped from $194 to $96, down 51%. The day became known as Coronacrash as it brought a widespread drop in asset prices. BTC at that time did not have such a robust market, which intensified this movement. The sharp drop contributed to BTC’s detractors questioning: what stores of value is this that loses 50% in a single day.
What happened next
However, the price of BTC has not died, as it has with the previous 400 cases of “death” of the cryptocurrency. In fact, what happened was that the cryptocurrency set a floor above $3,200 at that time. This was very important in the sense of establishing a security for BTC. After all, the market did not have large investors or funds, with the exception of Grayscale. That’s why there were fears that the drop would come in proportion to 2018, when BTC dropped by almost 80%. Less than two months later, BTC had already recovered and returned to $8,000. Soon after, big investors began to enter the market. The first of these was Michael Saylor, CEO of MicroStrategy, who made his first BTC purchase in August. Then came investors like Paul Tudor Jones III, Anthony Scaramucci and others who became not only investors but also BTC enthusiasts. Even former cryptocurrency detractors such as Stanley Druckenmiller and Ray Dalio started praising and buying BTC. Eventually, even countries turned to cryptocurrency as an alternative, which happened with El Salvador. The small Central American nation was the first in history to make BTC its official currency, which took place on September 7, 2021, and it also started building up BTC reserves. The influx of new investors – with long-term profiles – helped BTC renew its highs in the following months. At the end of 2020, the price closed above $30,000, almost 300% above the pre-Coronacrash value.
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