Has the bitcoin bubble burst?

Is crypto crashing?

The inventory market is down—and so is bitcoin. Since December 2024, bitcoin (BTC) has fallen from over $106,000 to beneath $78,000 in current days. (All figures on this article are in U.S. {dollars}.) That’s a 26% drop, most of which has occurred in February and March. The decline is probably going pushed by concern and uncertainty stemming from a global trade war and the ensuing risk of inflation, a recession or each. What does this imply for Canadian buyers? Let’s put this in perspective.

Crypto crash or only a correction?

A 26% value drop looks as if so much to buyers accustomed to inventory market actions, but it surely’s par for the course in crypto. Whereas a 20% fall in a serious inventory index just like the S&P 500 or the S&P/TSX Composite Index could be thought of a bear market, 30% is merely a correction in crypto. BTC corrections shake out buyers who can’t afford the volatility of their portfolio. In a full-blown crypto bear market—which has usually come round each three to 4 years—bitcoin has traditionally misplaced over 80% from peak to trough. (Learn extra about BTC’s bull and bear market cycles.) 

Regardless of these bear market crashes of over 80%, BTC has risen over 8,400% over the previous eight years, from Mar. 10, 2017, to Mar. 10, 2025. That’s a compounded annualized development price (CAGR) of over 74%. Nonetheless, it might not be prudent to count on this excessive a return over the following eight to 10 years, as a result of BTC is extra mature as an asset class and, consequently, its risk-return profile has been diminished to some extent.

Because the logarithmic chart under reveals, BTC’s positive aspects have tempered over the previous 5 years, in comparison with what they was once. All in all, whereas the current drop within the BTC value is brutal for buyers, it’s not out of the strange and, given BTC’s historic value actions, it’s to be anticipated.

Must you be grasping when others are fearful?

If you happen to’re invested in crypto for the long run, chances are you’ll be trying on the present value drop as a shopping for alternative. In investing, it’s greatest to be grasping when others are fearful, and fearful when others are grasping, as Warren Buffett, CEO of Berkshire Hathaway, has mentioned.

This implies shopping for when costs are down and buyers are panic-selling, and promoting when costs and greed are excessive. There’s truly a concern and greed index that tracks the heartbeat of the crypto market. Proper now, it’s screaming concern. That makes the present market a attainable shopping for alternative, for these prepared to abdomen the chance.

The graphic above reveals the CMC Crypto Worry and Greed Index at 25, bordering on excessive concern (the pink portion). Usually, intervals of greed or excessive greed are good shopping for alternatives. 

CMC Worry and Greed Index within the current previous

Because the desk under reveals, this index has constantly indicated concern out there throughout the previous month.