Bitcoin climbed above $4,000 USD for the first time since Christmas. As it does, some are looking at yearly Bitcoin lows to assess their situation. Somehow that makes price data look more encouraging. If we change the way we look at it, we change the way we feel about it but that shouldn’t necessarily be encouraging.
Do the Numbers Lie?
When Bitcoin prices are on the rise, people naturally focus on the fact that winning feels good. Those who are out, focus on the so-called FOMO. Then Bitcoin prices start to stumble and roles reverse: Those who “suffered” from FOMO now feel relief and those who were brimming with all the feel-good chemicals in their brain, start experiencing negative emotions.
Then the numbers come in and someone figures out that everything in life is a matter of perspective. In comes the role of the human mind on those perfectly neutral numbers. The drive to find a pattern and go back to feeling good, gives us an impulse to twist what we see. Justifying the reason to stay in Bitcoin and why despite having an 80% drop in price over the last year, other people should consider buying Bitcoin, someone found a way to twist the numbers to find an encouraging pattern.
Yearly Bitcoin Lows
Here is the pattern that makes the recent rise in prices above $4,000 USD seem encouraging and helps people forget that 80% hit they took last year: Yearly Bitcoin Lows are progressively higher on a year by year basis.
- Bitcoin’s lowest price in 2012 was $4 USD.
- In 2013 it was around $65 USD.
- In 2014 the lowest price was around $200 USD.
- 2015 ushered in a lower low than the previous year with a price of around $185 USD.
- 2016 saw the lowest price of Bitcoin increase to around $365 USD.
- In 2017 the lowest Bitcoin price was about $780 USD.
- In 2018 the lowest Bitcoin price was around the $3,200 USD mark.
The Problem with the Yearly Bitcoin Lows Pattern
It seems that even these numbers should be discouraging although many would look at them as the light at the end of the tunnel. The lowest Bitcoin price in 2019 cannot be higher than $3,700 USD, which means that the yearly Bitcoin low this year, cannot represent an increase of more than 15.6% with relationship to the lowest Bitcoin price in 2018.
Compared to the years quoted above, that would automatically make 2019 the second worst year in terms of yearly Bitcoin lows, with the chance of becoming the worst. Here are the percentage increases in yearly Bitcoin lows on a year by year basis:
- From 2012 to 2013, the lowest Bitcoin price increased by around 1,500%.
- From 2013 to 2014, the lowest Bitcoin price jumped by more than 200%.
- From 2014 to 2015, the lowest Bitcoin price went down by 7.5%.
- From 2015 to 2016, the yearly Bitcoin low increased almost by 100%.
- From 2016 to 2017, the yearly Bitcoin low went up by more than 100%.
- From 2017 to 2018, the yearly Bitcoin low went up by more than 300%.
Look at the Numbers Again, or Never at all!
This should encourage more people to look at the numbers in a more objective fashion, or not at all. As bitcoin moves slightly above $4,000 USD, we should all remember that as an investment for fiat gain, the price patterns – whether they are related to yearly Bitcoin lows or to other types of number massaging exercises – is not encouraging. It is the tech, the freedom that Bitcoin affords and the opportunities that Bitcoin holders will have in the future what should drive people who suffer from FOMO to trade their fiat for BTC. These factors should also be the ones that make all the hodlers feel good.