Crypto

What’s the Cryptocurrency Bubble and When Will it Burst?

Published

2 years ago

January 10, 2024

What’s the Cryptocurrency Bubble and When Will it Burst?

You’ve seen those dramatic peaks and valleys in Bitcoin prices lately that leave your stomach doing flip-flops.

Talk of bubbles bursting sends shivers down your spine. Is the crypto craze just froth that’s bound to evaporate? Or is blockchain the revolution set to rewrite all the rules?

Before you cash out or go all in, get the inside scoop on understanding cryptocurrency bubbles. Learn what’s causing this volatility, if markets are destined for a big pop, and whether your coins can recover.

In this article, we analyze the bubble buzzwords, and chart past crashes that will equip you with expert tricks to weather the impending crypto storm.

So buckle up and hang on tight. This bubble breakdown will give you the insights and fortitude to thrive, no matter which way the cryptocurrency winds blow next.

Brief History of Crypto Bubbles

Cryptocurrencies are notorious for their dramatic rises and falls, with Bitcoin leading the charge in creating both frenzied bubbles and devastating bursts within the crypto market.

Looking back at the short but volatile history of Bitcoin and other major cryptocurrencies, distinct bubble patterns emerge.

For example, Bitcoin had its first significant bubble in 2013, reaching a peak of over $1,000 in November after starting the year around $13. Mainstream media attention drove prices upwards as exchanges and users jumped on the bandwagon.

The bubble soon burst, with Bitcoin crashing in 2014 to around $300. This represented an almost 80% price drop, leading many to pronounce Bitcoin dead.

Similarly, after hovering around $1,000 per Bitcoin in early 2017, prices accelerated rapidly as crypto enthusiasm exploded. By December 2017 Bitcoin had soared to almost $20,000 per coin, bringing other cryptocurrencies like Ethereum along for the ride.

This bubble was driven by hype cycles, fears of missing out, and retail investors pouring savings into cryptos hoping to strike it rich.

Unsurprisingly the 2017 bubble could not be sustained. After peaking around Christmas, Bitcoin prices crashed over 2018. By December 2018 Bitcoin was trading below $4,000 per coin – almost 80% down from its peak.

The broader crypto market followed a similar trajectory, shedding billions in total market capitalization. The crash led to a “crypto winter” and questions about the future viability of cryptocurrencies.

4 Signs of Cryptocurrency Bubble

In 2021 cryptocurrency prices exploded once more, taking Bitcoin to new highs above $60,000 by April 2021. Signs that this was another bubble cycle include mainstream media and retail trading mania, celebrity promotions, scams, and inexperienced investors mortgaging homes to buy crypto.

In recent months, Bitcoin experienced a prolonged price rally throughout the month of January, marking one of the longest consecutive winning stretches for the cryptocurrency over the past 6 years. This upward momentum spilled over to benefit prices across the broader digital asset markets.

However, analysis suggests that this surge was not fueled by high trading volumes or liquidity.

Essentially, speculative mania and hype cycles around overvalued assets. This latest cryptocurrency run-up also comes on the heels of the FTX crash due to its bankruptcy in November 2022, which severely hampered liquidity across crypto markets industry-wide.

Since the start of 2023, Bitcoin has carved out substantial gains in a relatively short period. However, experts believe this rise has been built on an unsustainable foundation of low liquidity and speculative fervor rather than lasting traction.

It remains to be seen whether Bitcoin and other major cryptocurrencies can maintain altitude or if this tentative ascent was just the latest bubble destined to burst.

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4 Signs Of The Next Cryptocurrency Bubble Burst

1. Prices Lose Touch with Fundamentals

One warning sign a crypto bubble is forming and set to burst is when prices become drastically disconnected from underlying value fundamentals. Most cryptocurrencies don’t have clear valuation models like traditional assets, but experts suggest prices are in a bubble when coins trade far beyond reasonable adoption or utility.

2. Retail Trading Frenzy

Cryptocurrency bubbles are often fueled by hype-driven retail investing mania. Warning signs include friends, family, and neighbors talking about crypto, mainstream media hype, celebrity promotions, and inexperienced investors taking on massive exposure. Previous burst bubbles were marked by the general public piling into coins near the peak.

3. Scams and Fraud ProLiferation

The cryptocurrency Wild West lends itself to scams that reach a peak during bubble cycles. The next burst may be preceded by rising instances of fraud, questionable ICOs, fake celebrity endorsements, pump-and-dump schemes, and shady exchanges – indicating hype has gone too far.

4. Technical Analysis Flashing Warning Signs

While crypto markets are extremely difficult to model and predict, technical analysis can identify indicators of impending corrections.

Warning signs include a high Relative Strength Index (RSI), slowing price momentum, rising volatility, and violated support levels. Sophisticated crypto investors closely watch these signals for signs of trouble brewing.

Also Read: Crypto Investments: How To Do It Responsibly?

What Happens After The Burst?

So a cryptocurrency bubble has popped and prices come crashing down, now what? Based on past bubbles like in 2018 and 2021, some typical aftermaths include:

Prices Bottom Out

After a major correction, cryptocurrency prices tend to continue dropping for some time as people panic sell and losses compound. For example, Bitcoin bottomed out around 80% below its peak in 2018 before stabilization kicked in.

Crypto Winter Sets In

The bubble aftermath is often referred to as “crypto winter” – a period of sustained bearish sentiment, decreasing interest, and limited price gains. Volume and trading activity dry up as investors turn away from crypto. This can last over a year after major crashes.

Projects Shutter Operations

The fallout hits hard. Many cryptocurrency projects, companies, and exchanges cannot survive the depressed business environment post-crash and close-up shop. In 2018, over 800 crypto ventures shuttered following the bubble burst.

Underlying Development Continues

Behind the scenes, development continues on building blockchain infrastructure, networks, and innovative crypto applications – even amid lower prices. The underlying technological value persists regardless of market conditions.

Market Consolidates and Recovers

Crashes wipe out speculators but the strongest hands remain. As hype dissipates, the market consolidates around cryptos with staying power until prices stabilize and interest returns. Of course, the rollercoaster ride eventually heads upwards again with the next bubble building.

While the aftermath of a burst crypto bubble can be painful, history shows the market does recover in time. The key is planning ahead and only investing what you can afford to lose.

Also Read: The Role of AI to Identify Sustainable Crypto Breakouts

How to Survive the Crypto Bubble Burst

Have a Game Plan in Place. Before investing, understand your risk tolerance and have a strategy for different scenarios. Set targets for taking profits on the way up and limit stop-losses on the way down.

Maintain a Defensive Portfolio. Don’t overexpose yourself to crypto, and choose established coins with better fundamentals. Allocate only a responsible percentage of assets so you remain financially secure even with drops. As always, try not to go for unbacked crypto assets. Research shows that they cannot help to diversify portfolios.

Keep an Eye on Warning Signals. Watch for signs like cooling technical indicators, positive news generating little market movement, and bubbles in DeFi platforms. React quickly rather than ignoring the writing on the wall.

Mitigate Emotional Reactions Don’t panic sell. Bursts historically pass and markets recover. Have conviction in your investments and avoid fear-based moves you may regret long-term.

Take Profits on the Way Up Nobody can time peaks perfectly. Scale out of positions when hitting goals, allowing you to capture gains while maintaining exposure for future volatility swings.

Also Read: Diversify Your Portfolio with Crypto Stocks: Here’s Why You Should

Conclusion

Cryptocurrency bubbles may be nerve-wracking, but they have become an expected phenomenon in the market’s short history. The surges produce life-changing gains, while the bursts create incredible losses. But bubbles come in cycles that see crypto eventually regain steam.

The central question becomes whether this is a sustainable, albeit turbulent, trajectory for cryptocurrencies or a house of cards bound to fully collapse.

History suggests cryptocurrencies are resilient despite their volatility. Blockchain as a technology and crypto coins like Bitcoin withstand repeated booms and busts while continuing advancement in fits and starts.

Still, the modern markets remain in uncharted territory. The scale and frequency of recent bubbles breed uncertainty.

By understanding the causes of cryptocurrency bubbles, recognizing warning signs of impending bursts, acknowledging these patterns will likely persist, and strategizing to navigate the manias and crashes, investors give themselves the best chance of coming out ahead when the winds shift suddenly.

Cryptocurrencies offer an opportunity worth chasing for many, but only with full knowledge of the turbulence these assets often provoke. Buckle up and brace yourself if you decide to pursue the ride – bubbles will likely continue to blow and pop in crypto’s foreseeable future.

Crypto

OKX Announces Direct Crypto Aid for Venezuelans Hit by Devastating Twin Earthquakes

Published

8 hours ago

July 3, 2026

Press Room

OKX Announces Direct Crypto Aid for Venezuelans Hit by Devastating Twin Earthquakes

Key Takeaways

OKX Opens Airdrop for Venezuelan Earthquake Victims

OKX, one of the largest cryptocurrency exchanges by volume, has taken action to help Venezuelan users affected by the twin earthquakes that left over 2,000 dead and hundreds of buildings collapsed.

On social media, using its Latam account, OKX referred to the twin earthquakes that hit Venezuela on June 24, 2026, and how the cryptocurrency community has responded to this event in one of the Latam countries with growing crypto adoption.

“We know that these days have been difficult. But we have also seen something extraordinary: the solidarity of Venezuela and the entire international community, which fills us with hope,” it declared.

To help Venezuelan users in regions hit by the natural disaster, OKX announced it will distribute 20 USDT to each user with proof of address (POA) verifying they reside in La Guaira, the state most affected by the twin earthquakes.

While OKX did not disclose the total funds available for this initiative, it pointed out that support was limited and would be distributed on a “first-come, first-served” basis.

The funds will be automatically credited to the accounts that fulfill the POA requirement. “No registration, claim code, or qualifying transaction is required; the 20 USDT reward is automatically credited once eligibility is confirmed,” the exchange explained.

“We know that the road ahead will require effort, help, and support from everyone for a long time. But you will not walk it alone. We are one region, and we will be with you on this journey. We stand with you, Venezuela.” OKX concluded.

OKX’s relief efforts follow a similar campaign by Binance. The most popular exchange in Venezuela pledged $3 million to users residing in La Guaira, Distrito Capital, Miranda, Aragua, Carabobo, Falcón, and Yaracuy, offering a similar path for users to reclaim 20 USDT via redeemable vouchers.

Crypto

Trump Made $1.4bn From Cryptocurrency Since Returning to Office

Published

19 hours ago

July 3, 2026

Press Room

Trump Made .4bn From Cryptocurrency Since Returning to Office

Donald Trump made $1.4bn (approximately £1bn) from his cryptocurrency dealings in his first year back in office, in what his former White House lawyer has described as part of “the greatest onslaught of corruption in the history of mankind.”

Overall, Trump pulled in at least $2.2bn (£1.65bn) from his vast holdings, including real estate assets, in 2025. By comparison, his enterprises pulled in $662m (£495m) in 2024 before he returned to the presidency.

The US president – who denies any wrongdoing – received around $500m (£374m) from $WLFI, the digital currency sold by his family’s main crypto firm World Liberty Financial (WLF).

Trump also got a windfall from his $TRUMP meme coin, which was launched three days before his inauguration and earned him more than $600m (£449m).

The coin was dismissed as a ‘pump-and-dump scheme’ by analysts and led to hundreds of thousands of mostly small investors losing money.

The figures were released as part of Trump’s 927-page mandatory financial report for 2025.

An additional $500m (£374m) deal – struck days before his second inauguration in January 2025 – to sell 49% of WLF to representatives of a high-ranking Emirati royal has invited accusations of corruption.

The deal saw $187m (£140m) of the initial payment steered to entities controlled by the Trump family, according to the Wall Street Journal.

Months later, the UAE got the green light to import 500,000 Nvidia AI chips, despite concerns from US security officials.

Former White House lawyer Ty Cobb, who was part of the Trump administration’s legal team between 2017 and 2018, accused the president of violating parts of the constitution designed to prevent federal officials from engaging in corruption or being unduly influenced by foreign powers.

“Several hundred million dollars related to those coins,” Cobb told CNN. “How can that be anything other than trading on his image and likeness in violation of the emoluments clause?”

He added: “We are seeing the greatest onslaught of corruption in the history of mankind in the last 18 months.”

The White House has called the accusation “bogus and irrelevant”. Trump denied that he was profiting from the presidency, adding: “We have funds that run my money.”

“He got richer,” California’s governor Gavin Newsom posted on X. “His crypto supporters got rug-pulled.”

Lee Reiners, a former Federal Reserve Bank examiner who now specialises in cryptocurrency, told the New York Times: “It is hard to wrap your head around that the president of the United States would engage in this level of self-enrichment at the expense of so many of his supporters.”

He added: “This is a president of the United States who has made more money off crypto since he took office than he made in any prior year in his entire business career.”

Crypto

Senate Urged to Vote on CLARITY Act Before August Recess as Lawmakers Return July 13

Published

1 day ago

July 2, 2026

Press Room

Senate Urged to Vote on CLARITY Act Before August Recess as Lawmakers Return July 13

Key Takeaways

Limited July Schedule Raises Urgency for Floor Vote

Efforts to pass a federal crypto market-structure bill have entered a critical phase as the Senate remains in recess until July 13. The advocacy group Stand With Crypto on July 1 urged supporters to contact Senators and push for a floor vote on the Digital Asset Market Clarity Act, or CLARITY Act, before lawmakers leave for the August recess.

The timeline leaves a narrow window for action following months of committee work and industry lobbying. Supporters say the bill would reduce regulatory uncertainty by establishing clearer federal rules for digital asset issuers, trading platforms, developers, and market participants.

“The Senate is in recess. The clock on Clarity is running,” Stand With Crypto noted on X, adding:

“The window before the August recess is short, and when Senators return on July 13, they can vote on the Clarity Act to end years of regulatory guesswork. Don’t let the window close. Call your Senators to schedule a vote on Clarity.”

The legislation advanced in June when the Senate Banking Committee approved H.R. 3633 in a bipartisan 15-9 vote. The bill outlines agency oversight, registration pathways for crypto firms, consumer protections, and compliance standards across digital asset markets.

Lawmakers return to Washington on July 13 after the Independence Day recess, leaving Congress with just eight legislative business days before the planned August recess. The compressed schedule gives lawmakers limited time to consider the CLARITY Act alongside annual defense and government funding legislation.

Industry Groups Increase Pressure on Senate Leadership

Industry advocacy has intensified as the legislative calendar tightens ahead of the 2026 midterm elections. More than 200 organizations, including Coinbase, Ripple, Kraken, Circle, Binance.US, Uniswap Labs, Paradigm, Andreessen Horowitz, and Stand With Crypto chapters, have urged Senate leaders to bring the bill to the floor.

Mason Lynaugh, policy director at Stand With Crypto, said:

“There’s a limited window to get this done, with few remaining days left in the current Congress before the midterm elections. If Senate leaders don’t schedule a CLARITY Act vote in the coming weeks, an enormous amount of bipartisan work, compromise, and progress, could be wasted.”

Ripple has also promoted the effort in Washington, D.C., including a branded CLARITY truck near Capitol Hill to raise visibility as lawmakers consider crypto legislation.

Stand With Crypto cited polling showing nearly three-quarters of surveyed crypto owners in Senate battleground states are more likely to support candidates who favor clearer cryptocurrency rules. The group also reported that more than one-third of respondents use digital assets for personal transfers, while 21% use them for monthly expenses.

Despite the momentum, analysts remain cautious. Galaxy Research lowered its 2026 passage estimate for the CLARITY Act to 50-50 from 60%, citing the absence of a scheduled Senate floor vote, no motion to proceed, and no unified text between Senate committees.