Bitcoin Bear Markets: We’ve Been Here Before

This is an opinion editorial by Stephan Livera, host of the “Stephan Livera Podcast” and managing director of Swan Bitcoin International.

Some newer Bitcoiners could be upset about what’s gone on lately, especially if they were expecting very high highs for bitcoin or no large drawdowns. It seems like in the last few weeks, it has become evident that this is, in fact, a bear/sideways market.

From peak to trough, we’ve seen a 75% drop from $69,000 to around $17,600. We’ve seen a “crypto contagion” of sorts, with the blow-up of the Luna/UST ponzi, the liquidation of Three Arrows Capital (3AC) and other “crypto” market participants undergoing stress, such as Celsius stopping withdrawals and other entities having exposure to 3AC (e.g., Voyager, BlockFi).

reality is that bitcoin spent about 75% of 2017 under $5,000, and about 90% of 2017 under $10,000. So, if you were consistently long-term stacking, you are still up. You would have been accumulating all the way through, and in those times where bitcoin’s price was low (e.g., December 2018 or March 2020, around $3,000 to $4,000), you were accumulating more satoshis for your fiat. And now we have companies like Swan Bitcoin that explicitly help customers regularly stack sats with a long-term focus.

worst times on record, and inflation is running high all around the world, this is precisely the time that traditional investors will be open to reconsidering their allocations. It’s also fair to say that bitcoin has already gone through its deleveraging cycle, while the pain in other asset classes may still continue. With all this pain in the bond markets, it’s completely reasonable for bond investors to decide they’d rather purchase some bitcoin, an asset that can’t be easily manipulated by governments and central banks around the world.

There’s another silver lining: people get another chance to stack cheaply. Those who say “early Bitcoiners had an unfair opportunity to get coins cheap or easy” have less ground to stand on. Bitcoin right now is relatively cheap and it’s a great chance to take ownership of some sats and stack them in your cold storage.

Then, maybe in a few years time, people will look back and say how “lucky” you were to be stacking in the $20,000 range. The reality of it is that any long-term HODLer or stacker has had to go through big peak-to-trough drawdowns. Bitcoin is no stranger to 80% drawdowns, with three in its lifetime so far, and with many lesser drawdowns of “only” 50%. I accept this volatility as the price to be paid for Bitcoin’s incredible qualities and increased purchasing power over the long term.

around 120% per year. Can you even think of an asset class or index that outperformed this?

As the trope goes, bear markets are great for building. There will be a whole new crop of people who learned their lesson the hard way with Luna, Celsius, 3AC, Voyager, etc., and some fraction of them will now be ready to improve their technical knowledge of Bitcoin. They may even start building something in the Bitcoin ecosystem.

Whether you want to build a company, grow your local meetup, or find a Bitcoin job, now is a great time. You might take this opportunity to connect with local Bitcoiners in your area to get the local Bitcoin meetup going, help onboard local merchants to accept bitcoin/Lightning Network payments, and practice your skills in event organization or Bitcoin education and presentation. Bear markets are often when you can find out who is truly committed to the cause, and this may help find the right kind of people to work with or learn from. Bear markets are also a time when experienced Bitcoiners can help new Bitcoiners going through their first bear market at the local meetup.

When the cycle turns and the bull market is back, you’re now in a better position having already built up your skills, meetup group, venture, business or project. You might have already established a small but loyal user base for your Bitcoin project, and they may help with contribution on the project or help share the word about it to their friends. If you’ve done a good enough job building your product or service, Bitcoiners will recommend it to their families and friends and you can “catch the next wave” in the next bull cycle.

Sphinx, Breez and Fountain. It’s getting easier and easier to set up your BTCPay Server and Lightning node in just minutes with services like and take payment or build bitcoin/Lightning-enabled businesses. We’re seeing Lightning-enabled competitors to traditional news aggregator and discussion sites such as Stacker.News, and Lightning-enabled gaming companies such as THNDR Games and Zebedee.

The wallets are getting easier to use and more reliable, too. For newcoiners, Muun Wallet is a great fast setup choice because it really smooths over the difference between on-chain funds and Lightning. This makes it very easy for a new Bitcoiner to self custody, and also experience the “magic” of fast and cheap Lightning payments. In years gone by, doing larger payments on Lightning wasn’t so reliable unless you already had big channels, and new users would often get confused because they didn’t have inbound liquidity to receive a payment. But these things are improving over time, as wallets iterate and make the experience for new users smoother and easier.

Muun, Phoenix and Breez.

If there was ever a time to grow the peer-to-peer and/or circular economy of Bitcoin, and help businesses and individuals directly sell their products and services for bitcoin, this is it. We’re seeing large services with millions of users enable Lightning, such as Cash App, Bitfinex, Kraken, Paxful, Chivo, OKcoin and other smaller companies. Robinhood stated it is enabling Lightning at Bitcoin 2022. So, upwards of 50 million people can spend with Lightning, even if many of those people don’t know it or understand yet! Bitcoin startups such as Oshi are helping Bitcoiners grow the Bitcoin merchant scene in their local area, and we see the likes of OpenNode and IBEX Mercado making their solution available for merchants, too.

Mt. Gox’s failure in 2013 led to a resurgence in interest in self custody, and it was an easy, recent story that could be told to explain the dangers of custodial-ism and fractional reserve.

The human rights aspect of Bitcoin is growing, too. One great recent example is the Human Rights Foundation’s (HRF’s) Oslo Freedom Forum (OFF), which I attended recently. There, I heard stories of activists, journalists and technologists who are putting themselves on the line to fight tyranny. And in many cases, the speakers and attendees at OFF could instantly see the value proposition of being able to use Bitcoin, whether that is for fundraising or operating under adversarial conditions. This year, there was a Bitcoin academy, where Bitcoiners were teaching various aspects of how to use Bitcoin, bitcoin and privacy, and quickly setting up BTCPay Server.

1.7 billion people in the world who are unbanked, with many living under high inflation. Sergej Kotliar from Bitrefill also had an excellent thread on what we’re really doing on here:

So, while irresponsible shitcoiners and degenerate yield farmers may have caused this recent sell down in bitcoin’s price, another silver lining is that the industry may now advance with a deeper appreciation for full reserve banking. We may see renewed interest in proof of reserves techniques so that exchanges and service providers may prove their bitcoin balances. We will also see more interest in non-custodial adoption. Instead of chasing “6% yield on your stables” only to be down in purchasing power anyway thanks to high inflation, we will continue growing out the Bitcoin ecosystem.

Remember that bitcoin spends a lot of time not at all-time highs. But when bitcoin is off the all-time high, traditional media love to remind us of this fact. And yet the funny thing is, bitcoin is still dramatically up versus most other assets over the long term, it’s just not up by as much as it was recently.

 So, at the end of the day, we’ve been here before, and we’ll be here again. Take it as an opportunity to stack sats, continue building, continue educating and advocating, and in a few years you will look back and realize that you made the right decision.

This is a guest post by Stephan Livera. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.