March 12, 2020 will go down in history books as Black Thursday. That day began a two-day collapse, more than 50% of Bitcoin. It also rocked the stock market, precious metals and cryptography.
But still, that fateful day in retrospect was the best thing that happened to Bitcoin throughout the year and was a crucial factor for the asset to reach a new historical record and be traded close to $ 30,000 today. Here are all the reasons.
Recalling the start of the panic pandemic in early 2020
2020 started roaring as investors expected, with the stock market hitting new highs and Bitcoin trading above $ 10,000. But in the first quarter of the year, the whole world changed due to the emergence of the pandemic.
Anyone watching Bitcoin price charts on March 12, 2020, at the time, for the first time, considered cryptocurrency a serious risk.
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The panicked sale and the stop-loss cascade being hit as investors made money fearing the approaching impact on the economy took Bitcoin back to $ 3,800.
But the catastrophic moment now marks the greatest historical example of contrary investment of all time and it is largely responsible for Bitcoin setting a new historical record in the same year.
Black Thursday is just a distant memory in terms of price action at this point, but its impact remains | Source: BTCUSD on TradingView.com
Why Black Thursday was the big moment of truth for Bitcoin
The capitulation clears the markets of any remaining weak hands, and the $ 10,000 to $ 3,800 flip did just that. It also instilled fear in BitMEX derivatives traders – the then market leader – enough to stop them risking liquidating their BTC. The exchange has since fallen out of favor.
The price action also did two other things: it brought Bitcoin to an extremely attractive price point for newcomers and, at the same time, confirmed that the longer-term resistance became support and that the market bottom was down I was coming.
To save the stock market and the global economy at the same time, governments printed fiat currency and issued various forms of stimulus. Efforts can dramatically increase inflation in the coming decades, leaving investors fighting for an asset with an advantage.
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That asset has always been Bitcoin and will continue to be due to its extremely limited supply and incredible long-term potential. Now that institutions are recognizing this and, at the same time, seeing that the positive side in other markets is limited, cryptocurrency could not be more attractive.
The increase in demand is reflected in the recent price increase and is only further amplified by the impact of a supply recently cut in half. Without Black Friday, the perfect storm for Bitcoin might not have arrived.
Now that he is here, he is expected to dominate the world of finance.
Featured image from Deposit Photos, Charts from TradingView.com