Crypto Market crash: A look at crypto volatility during pre-covid and now

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Crypto and volatility are two terms that go hand-in-hand. The global cryptocurrency market is slowly on its way to recovery with Bitcoin rebounding the $20,000 mark. The crypto market cap has increased by more than 2 per cent to $902 billion in the last 24 hours, according to CoinMarketCap data at the time of writing. The world’s largest crypto Bitcoin had hit an all-time 18-month low, whereas Ethereum witnessed a more than 55 per cent drop. However, this is not the first time that cryptos have witnessed a massive drop. Today, we list out all the times cryptocurrencies witnessed volatility since 2019.

Pre-covid era (2019)

2019 was a big year for cryptocurrencies, as more and more investors jumped from the stock market to enjoy the crypto frenzy. As per Coinmarket cap, the total crypto-market capitalisation in January 2019 was around $130 billion.

The rising interest in cryptocurrencies drove the crypto-market capitalisation to a whopping $180 billion, by the end of July. In December 2019, Bitcoin pushed all its barriers and wider adoption of cryptos lead the market tad under the $200 billion threshold. It is worth noting that the pre-covid era witnessed volatility with usual movements and a few spikes in the crypto prices. A correction of the 15 to 50 per cent range could be seen in the crypto assets.

Covid times (2020- 2021)

The covid outbreak caused havoc and every financial asset lost its value. However, one sector was particularly booming—the crypto sector. January 2020 was a good month for crypto assets with the trading volume spiking from $200 billion to $255 billion.

Investors had two favourite coins—Bitcoin and Ethereum. As per the Coinmarketcap tracker, Bitcoin was in the dominant category alluring over 65 per cent of investors. Ethereum also garnered quite a bit of investors for cryptos. Little did investors know about the upcoming crash.

The Covid induced second wave finally hit the crypto maket. On March 13, Bitcoin dropped below $4000 by more than 50 per cent since 2019, as per Coindesk. Other cryptos also dropped at the same time—Ethereum lost 46 per cent and XRP fell by 40 per cent.

The year 2021 was not bad for crypto assets at all. In January 2021, Bitcoin returned to the $29,000 mark, a growth of 59.8 per cent since 2020, as per CoinDesk. The crypto sector’s total market cap grew by 187.5 per cent. Meanwhile, Solana grew by 11,000 per cent and Terra grew by 12,000 per cent.

May 2021, again witnessed a drop of 53 per cent. This was at the time when Elon Musk invested $1.5 billion in Bitcoin and said that Tesla would accept cryptocurrency as a mode of payment. But Musk did a u-turn and citing ‘environmental concerns’ withdrew his investment. Notably, this was also the time when China announced a crackdown on cryptos. Fueled by the regulatory uncertainty and environmental concerns, the crypto market plunged investors’ money by $1 trillion.

However, the price of Bitcoin and Ethereum rose after a couple of months in August 2021. Ethereum was up by 200 per cent and Bitcoin by 400 per cent. This was also a time when the rise of NFTs and meme-coins like Doge and Shiba Inu caught investor attention.

But the omicron variant in December 2021 was bad news for cryptos. Ethereum, Ripple, and Bitcoin plummeted in price yet again.

The state this year (Jan 2022 to June 2022)

The year 2022 has not been the best one for crypto assets. The crypto market crashed by a 10 per cent decline of $205 billion during this time. Some even called it ‘market-correction’. However, a new trend of investing in eco-friendly coins increased.  In May 2022, coins like Solana and Cardano outperformed Bitcoin and rose by 27 per cent. This showed that investors are keen to invest in new eco-friendly coins as well.

The last month has been tough for crypto holders with the market dropping more than 50 per cent. This drop could also be associated with the recent Luna-Terra fiasco. where the price of one asset (Luna) became zero causing a ‘black-swan’ event, which eventually caused a loss of trust among investors and whales who were quick to sell off their digital assets, eventually slipping towards a market crash.





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