Aaron Brown, Columnist

Crypto’s Terrible Year Was Actually Pretty Good

Bitcoin’s collapse in 2018 fell between the rapid plunge of 2011 and the slower one in 2013.

December 20, 2018 at 10:30 AM UTC

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

Bitcoin may be down, but it’s not out.
Photographer: David Ryder/Getty Images North America

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It was one year ago this week that Bitcoin reached an intraday peak of almost $20,000. Since then, it’s been all downhill. The market value of all cryptocurrency assets have fallen to about $100 billion from about $800 billion at the start of the year. That looks bad, but if you look at the market’s fundamentals, 2018 gets a B+ grade.

To put the price decline in perspective, the chart below shows Bitcoin prices in 2017 and 2018 in blue, and superimposes prices from Bitcoin’s 2011 and 2013 peaks, all scaled to the same peak price and time. Bitcoin’s 2017 price rise was smaller and steadier than earlier run-ups. The decline fell between the rapid 2011 event and the slower 2013 one.