Bitcoin Gets a 50% Buzz Cut

It always comes back – eventually. Bitcoin is making new multiyear lows today as prices break back below $60K to the lowest level since September 2024. Since the high last fall, prices have been in a steady downtrend in a stairstep pattern lower.

With today’s decline, the current drawdown in Bitcoin has exceeded 50%, a depth it hasn’t reached since late 2023. The chart below shows Bitcoin drawdowns relative to all-time highs dating back to 2007, when its price first closed above $1,000 per coin. This current decline represents the fourth time prices have reached a new record high and then got cut in half, with the last such decline being in May 2022.

The chart below shows Bitcoin’s in the year after each of the prior periods when prices first fell 50%+ from an all-time high.  One of the things you almost hear about Bitcoin after it sees a large decline like the current one is that “prices always come back”. That’s an accurate statement, but after prices experienced a 50% haircut in the three prior periods, the road back to new highs wasn’t necessarily short or smooth.

As shown in the chart, one year after each of the prior three periods, Bitcoin was lower a year later than it was when the drawdown first reached 50%. Not only that, but in two of the three periods, it barely even experienced a bounce. The one exception was after the June 2021 drawdown when prices quickly rebounded to new highs, but almost as quickly returned back to new lows. Perhaps the best thing Bitcoin has working in its favor is that you don’t hear much about $500,000 or even million-dollar price targets anymore.

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