Still, with the heights bitcoin is reaching once again, the fear of a price correction is percolating in some traders’ minds. Although bitcoin has been climbing steadily higher since the U.S. introduced spot bitcoin ETFs, cryptocurrencies, including bitcoin, have a history of extreme volatility.

Bitcoin and other cryptocurrencies suffered after a wave of bankruptcies, collapses and negative rulings rocked the crypto world in 2022.

First, there was Terra’s LUNA coin debacle, which kicked off crypto winter that May.

After a brutal summer for crypto investors, the collapse of leading crypto exchange FTX in November of that year looked like the final nail in the crypto coffin.

Then, throughout 2023, both the SEC and Commodity Futures Trading Commission brought numerous regulatory lawsuits against some of the largest crypto exchanges and companies. Those suits hampered many exchanges and other crypto companies’ abilities to do business in the U.S., the world’s largest economy.

During that period, bitcoin dropped from its pre-crypto winter high of nearly $65,000 to a bottom of almost $16,000 before starting its recovery. That was a 75% swing in price in just over one year.

What Does Bitcoin’s Bounce Mean for Investors?

Although bitcoin appears to be in the midst of a significant bull run, there is of course no way to know how high the cryptocurrency will go before seeing another correction.

While it’s looking more and more like bitcoin is on a long-term rise again, the reality is that we are in unprecedented territory regarding a number of factors, including the geopolitical climate, economic indicators, crypto regulations and the Fed’s intentions regarding interest rates.

Cryptocurrency industry investors have learned that even in the best of times, predicting the short-term price action of digital assets is difficult. That holds particularly true in this market environment.