Thought Experiment: Bitcoin falls to $1000. I think it would recover.

[yhiaali3]

I agree with others in dismissing the possibility of Bitcoin dropping to $1,000, but ultimately, this is a thought experiment, and the possibility exists, even if it's only 1 in 1,000.

In any case, in my opinion, even if this highly improbable scenario were to occur, a recovery would happen quickly. As you mentioned in the likely reasons, many would see this as a golden opportunity to capitalize on the opportunity to buy Bitcoin at a very low price in the early years. Therefore, a recovery, even to just $10,000, would mean substantial profits, if it didn't rise even higher.

Of course, Bitcoin dropping to $1,000 would allow many individuals, not just companies and institutions, to buy large quantities, and this would allow the price to recover relatively quickly.

[free-bit.co.in]

I agree with others in dismissing the possibility of Bitcoin dropping to $1,000, but ultimately, this is a thought experiment, and the possibility exists, even if it's only 1 in 1,000.

In any case, in my opinion, even if this highly improbable scenario were to occur, a recovery would happen quickly. As you mentioned in the likely reasons, many would see this as a golden opportunity to capitalize on the opportunity to buy Bitcoin at a very low price in the early years. Therefore, a recovery, even to just $10,000, would mean substantial profits, if it didn't rise even higher.

Of course, Bitcoin dropping to $1,000 would allow many individuals, not just companies and institutions, to buy large quantities, and this would allow the price to recover relatively quickly.

If everyone, from individuals to large organizations, took advantage of the opportunity to buy Bitcoin in large quantities when the price dropped. Do you think it has a chance of dropping to $1k? Clearly, if there is always strong demand waiting at lower prices, bitcoin will never fall to $1k. This also means that if Bitcoin still falls  to $1k despite strong buying pressure beforehand, its chances of recovery are almost nonexistent. It will not surge as dramatically and rapidly as you might think.

If Bitcoin drops to $1k, meaning roughly a 99% decline from its peak, and that is no longer an opportunity but a disaster. Because no asset considered promising gets dumped that brutally, regardless of the reason.

[Shinpako09]

I’m also one of those who once fantasized that btc could crash. But I know the chances of that happening are very low. If it did crash hard, a lot of people would panic and start doubting the future of btc and the entire crypto space. However, just as there would be doubt, there would also be people who see it as a buying opportunity instead of panicking. Those who missed the train before probably wouldn’t miss the chance again to get on board. A recovery would likely need strong buyers. If people see whales buying again, it could trigger FOMO, and others would follow. That kind of chain reaction could push the market back up. Someone like Elon Musk probably wouldn’t miss that opportunity either. With his influence, confidence in crypto could gradually return. Whether it takes a short time or a long time, I believe it would eventually recover.

[colinistheman]

I know this will never happen because it will represent the biggest disaster of all time.  If Bitcoin falls to $1,000 I don't see the possibility of it recovering to where it is now because that would mean a lot of people dumping it and walking away and those money will not return to Bitcoin anymore. Although a lot of people might decide to put there spared funds there should there be a miracle thar will pump the price.

Yes, the scenario of Bitcoin falling to $1,000 sounds unrealistic in the current context, and I never believed it would happen either. But assuming that actually happens, I agree with you that the chances of it recovering to where it is now are zero. If that happen, it would even mark the end of the Bitcoin revolution, despite some people still buying at the time. Because if that happens, it mean the core belief in bitcoin has been broken, so do not expect large flows of money and confidence to return.

[yhiaali3]

I agree with others in dismissing the possibility of Bitcoin dropping to $1,000, but ultimately, this is a thought experiment, and the possibility exists, even if it's only 1 in 1,000.

In any case, in my opinion, even if this highly improbable scenario were to occur, a recovery would happen quickly. As you mentioned in the likely reasons, many would see this as a golden opportunity to capitalize on the opportunity to buy Bitcoin at a very low price in the early years. Therefore, a recovery, even to just $10,000, would mean substantial profits, if it didn't rise even higher.

Of course, Bitcoin dropping to $1,000 would allow many individuals, not just companies and institutions, to buy large quantities, and this would allow the price to recover relatively quickly.

If everyone, from individuals to large organizations, took advantage of the opportunity to buy Bitcoin in large quantities when the price dropped. Do you think it has a chance of dropping to $1k? Clearly, if there is always strong demand waiting at lower prices, bitcoin will never fall to $1k. This also means that if Bitcoin still falls  to $1k despite strong buying pressure beforehand, its chances of recovery are almost nonexistent. It will not surge as dramatically and rapidly as you might think.

If Bitcoin drops to $1k, meaning roughly a 99% decline from its peak, and that is no longer an opportunity but a disaster. Because no asset considered promising gets dumped that brutally, regardless of the reason.

You might be right, but this is a hypothetical scenario, and many unexpected things can happen.
Basically, as you mentioned, it's unlikely to drop to that price because there will always be strong demand at every dip, making it difficult for Bitcoin to fall to $1,000.

Let's suppose that, for some reason, there wasn't strong demand at the dip, or that selling pressure was stronger than buying pressure, and the price continued to fall to $1,000 and stabilized there. At that point, many people or companies would consider buying because it would be a great opportunity that wouldn't be repeated, and strong buying pressure would begin to push the price up.

Another possibility, which I consider unlikely, is that since Bitcoin has fallen so drastically, it will lose confidence, and no one will buy. In that case, yes, there won't be a rise; in fact, there might be further declines.

[Satofan44]

I voted No to this. You would have to put this into perspective, this is not like a standard stock market crash. If you put this scenario into the tech scene, it is the equivalent of bankrupting every top tech company in the USA at the same time. If Bitcoin tanks this much, practically most or all of the major infrastructure players would go bankrupt. So in the comparison we'd be speaking about all companies from Microsoft to Alphabet going bankrupt. We'd experience a massive loss in security, so at the same time we would be vulnerable from the actual perspective of the protocol too. I am not so confident that we could recover, because why would we?

Why? Because Bitcoin's value proposition of the most secure and active decentralized payment network has not changed.

This is of course possible if and only if:

- There is no other decentralized cryptocurrency which took Bitcoin's place and its competition was the main reason for the crash.
- There is no other fundamental reason like a successful 51% attack. (Bankruptcies aren't really "fundamental" for Bitcoin).
- There are no major bans or extremely harsh regulations.
- Money is still relevant, we haven't advanced to post-scarcity or so

Share your opinion

The thing is, two statements are different. Something can be the most secure and active decentralized payment network, but simultaneously it can also have some of the worst security when compared to all payment networks (centralized ones being included). This would just mean that there isn't anything better in the decentralized sphere, but it would not necessarily mean that it has high security itself.

[Asuspawer09]

It is very difficult to think that it is going to drop to a thousand dollars market price even though you mention a lot of possible scenarios I dont really think that it is enough to make the Bitcoin fall to that market price I mean even though this scenarios are for sure going to make a huge amount of impact in the market, there are still a lot of Bitcoin investors, I mean there are already a lot of investors around the globe that is going to easily jump it the moment the market price is dropping so the support for sure is going to be huge, and it is going to cause a huge recovery in the market, probably if all of this problem is going to happened at the same time it might be possible that Bitcoin is going to go back under 20k$ range, It might be difficult to drop it below 5k$ since that is already long time.

Still, we know that Bitcoin is a risk asset because of its volatility. We know it is still possible to happen even though we can't imagine it happening, or let's just say that it is possible, but it doesn't mean that it is going to happen. Because of those reasons, the best thing to do is just to always play it safe, diversify your assets, etc. Invest risk in the riskiest asset like Bitcoin on invest a small percentage of your portfolio on it, winning or losing your not going to go wrong if you are only investing an amount that you could afford to lose.

[jossiel]

Yes, I also think that it will recover.

Unlike the altcoins that they have a hype that dies and never recovers. It's different for Bitcoin that with its value that has seen globally.

Most of the investors that have missed buying the dip will start the buying craze that they all have been waiting for.

And it has already set the standard on the market and, people who's been speculating for so long will start to act not to miss this opportunity.

We've seen the bloodiest drops in the market in the past and it still recovers even without the institutions before.

[Jaweria parveen]

Yes, I also think that it will recover.

Unlike the altcoins that they have a hype that dies and never recovers. It's different for Bitcoin that with its value that has seen globally.

Most of the investors that have missed buying the dip will start the buying craze that they all have been waiting for.

And it has already set the standard on the market and, people who's been speculating for so long will start to act not to miss this opportunity.

We've seen the bloodiest drops in the market in the past and it still recovers even without the institutions before.

The current situation is neither good nor bad because Bitcoin increases its price every week and sometimes decreases it which is why it may not be possible to achieve it now, but it is correct to say that it will be possible with time. Obviously, it is not very strong due to its price and growth and when Bitcoin falls it becomes weak in terms of its price and loses its value. This is very wrong while this opportunity should not be waste because this is what investors want when Bitcoin is down and we buy it and cover our loss. Now such an opportunity will not come again and again so whoever has the opportunity to invest should buy Bitcoin at a low price. Now there are many difficulties in this because if it had achieved its goal without them these new wars would not have been applicable to it.

[Swordsoffreedom]

Yes, I also think that it will recover.

Unlike the altcoins that they have a hype that dies and never recovers. It's different for Bitcoin that with its value that has seen globally.

Most of the investors that have missed buying the dip will start the buying craze that they all have been waiting for.

And it has already set the standard on the market and, people who's been speculating for so long will start to act not to miss this opportunity.

We've seen the bloodiest drops in the market in the past and it still recovers even without the institutions before.

Although Bitcoin has been dumped multiple times in the past. But did you know that it never lost 99% of its value, even in its early days when it was just a speculative game? Meanwhile, Bitcoin now has a market capitalization of trillions of dollars and has become popular globally. Therefore, if Bitcoin were to actually drop to $1k, the situation would be very serious and completely different from the previous bloodiest drop.

Think about this, if bitcoin is truly different from the rest of crypto. It will never lose 99% of its value because only shitcoins go through that kind of collapse. Therefore, if that happens and Bitcoin drops to $1k, it would be no different from shitcoin

I seriously doubt it will be able to recover back to its old ATH.

[SquallLeonhart]

this is a hypothetical scenario, and many unexpected things can happen.
Basically, as you mentioned, it's unlikely to drop to that price because there will always be strong demand at every dip, making it difficult for Bitcoin to fall to $1,000.

Let's suppose that, for some reason, there wasn't strong demand at the dip, or that selling pressure was stronger than buying pressure, and the price continued to fall to $1,000 and stabilized there. At that point, many people or companies would consider buying because it would be a great opportunity that wouldn't be repeated, and strong buying pressure would begin to push the price up.

Another possibility, which I consider unlikely, is that since Bitcoin has fallen so drastically, it will lose confidence, and no one will buy. In that case, yes, there won't be a rise; in fact, there might be further declines.

This type of "thought experiments" are there to make it look like something is possible when it's not. Le me give you a thought experiment , what if I could be the king of the moon? There are no people on the moon, there is nothing to gain, no farmlands, what would I gain from it? Aside from a title? So are we writing a fantasy fiction novel now? We are not, so both questions are silly and not making any sense.

If there is a requirement for a serious answer, then my answer is that if the price starts to drop that much, I would sell all my belongings, my house, my car, and even take as much loan as I can and buy as much bitcoin as I possibly can. Because if there is nothing fundamentally wrong, then it will recover. But we all know, if there is nothing fundamentally wrong, then there is no way it would go that low.

[jossiel]

~snip~

The current situation is neither good nor bad because Bitcoin increases its price every week and sometimes decreases it which is why it may not be possible to achieve it now, but it is correct to say that it will be possible with time. Obviously, it is not very strong due to its price and growth and when Bitcoin falls it becomes weak in terms of its price and loses its value. This is very wrong while this opportunity should not be waste because this is what investors want when Bitcoin is down and we buy it and cover our loss. Now such an opportunity will not come again and again so whoever has the opportunity to invest should buy Bitcoin at a low price. Now there are many difficulties in this because if it had achieved its goal without them these new wars would not have been applicable to it.

It's not increasing every week. But I get what you're saying, it's due to its volatility. So, the price changes from time to time.

And as for the people who have been waiting for the opportunity, they're free to buy it if they can. But if they are not yet satisfied with the price and they want cheaper, they can wait all the time.

Although Bitcoin has been dumped multiple times in the past. But did you know that it never lost 99% of its value, even in its early days when it was just a speculative game? Meanwhile, Bitcoin now has a market capitalization of trillions of dollars and has become popular globally. Therefore, if Bitcoin were to actually drop to $1k, the situation would be very serious and completely different from the previous bloodiest drop.

Think about this, if bitcoin is truly different from the rest of crypto. It will never lose 99% of its value because only shitcoins go through that kind of collapse. Therefore, if that happens and Bitcoin drops to $1k, it would be no different from shitcoin

I seriously doubt it will be able to recover back to its old ATH.

I'm not sure in the early days when I was still not yet into Bitcoin. But that seems to be a fact that it really hasn't went down 99% from the ATH prices that it has been.

Despite that there's a global turmoil, people still believe that it's possible to see it go down to zero. Although they have to consider that there are lost bitcoins forever where it has kept its value and market cap on them so, it's not going to zero.

[Stalker22]

I'm not sure in the early days when I was still not yet into Bitcoin. But that seems to be a fact that it really hasn't went down 99% from the ATH prices that it has been.

Despite that there's a global turmoil, people still believe that it's possible to see it go down to zero. Although they have to consider that there are lost bitcoins forever where it has kept its value and market cap on them so, it's not going to zero.

Well, technically you are right, but I think there are two different things mixed up here: the existence of bitcoin and its market price.  The fact that millions of bitcoins are locked away forever (those famous "lost" coins) doesnt actually guarantee that the price cannot fall to zero.  If no one in the world wants to buy the rest of the coins in circulation anymore, the market cap theoretically disappears, regardless of how many coins are "burned".

Just to be clear, Im not saying that such a doomsday scenario will ever happen, but its possible.  For example, what do you think would happen if someone discovered a technical flaw or something else that could put everyones wallet at risk of unauthorized access?

[jossiel]

I'm not sure in the early days when I was still not yet into Bitcoin. But that seems to be a fact that it really hasn't went down 99% from the ATH prices that it has been.

Despite that there's a global turmoil, people still believe that it's possible to see it go down to zero. Although they have to consider that there are lost bitcoins forever where it has kept its value and market cap on them so, it's not going to zero.

Well, technically you are right, but I think there are two different things mixed up here: the existence of bitcoin and its market price.  The fact that millions of bitcoins are locked away forever (those famous "lost" coins) doesnt actually guarantee that the price cannot fall to zero.  If no one in the world wants to buy the rest of the coins in circulation anymore, the market cap theoretically disappears, regardless of how many coins are "burned".

Just to be clear, Im not saying that such a doomsday scenario will ever happen, but its possible.  For example, what do you think would happen if someone discovered a technical flaw or something else that could put everyones wallet at risk of unauthorized access?

Yeah, it's possible. But we also know the reality that these days when the price of Bitcoin goes down massively, there are investors who are waiting for that dip and ready to buy as much as they can.

And as for the flaw, I think there were articles that I've read before that there were technologies including the quantum computers that can decode someone's private keys.

But until now, we haven't seen one in actuality.

[d5000]

If you put this scenario into the tech scene, it is the equivalent of bankrupting every top tech company in the USA at the same time. If Bitcoin tanks this much, practically most or all of the major infrastructure players would go bankrupt.

I'd also expect many CEX services to close in this scenario, several ETFs would be discontinued due to low demand, etc.. But that's what I consider the chance to "drive the Wall Street guys out". There would be a major shift from centralized to decentralized services in consequence. I mentioned Monero in one of the previous posts also because in that case something similar happened: more than half of the centralized "infrastructure" (in regions like Europe, almost 100%) closed down due to regulatory difficulties. And even then it was able to reach new ATHs.

It would be a shift back to the Bitcoin of the 2010s, the "people's money". The centralized services aren't really necessary. And not everything would close - when we last saw $1000, in early 2017, there was already a quite diverse CEX landscape and even the first Bitcoin futures were traded.

We'd experience a massive loss in security, so at the same time we would be vulnerable from the actual perspective of the protocol too.

In my main scenario for this, a relatively slow 2-3 year long fall to lower lows with worsening sentiment, there would be a gradual hashrate reduction. However, the price level at $1000 would probably only last for a few days. It would be the result of a massive final panic and liquidation wave.

Of course you could ask: how do you then know that the $1000 panic is the final dump and we'll not see another panic bringing us down to $500, $200, or $0? But one can answer that with the following reasons:

- if "the fundamentals" have not changed, each low is less likely, so it makes sense to "cut" the "chain of lower lows" at some point,
- $1000 is a psychological level (and the $1100-1200 area was also the first major Bitcoin high in 2013), so there may be much buy orders waiting at that point,
- we could argue: if it falls much lower than $1000 even taking into account the previous point, then maybe Bitcoin is really doomed, because the next psychological level would be $100 which is VERY low when taking into account the security budget (that would be 2012-level security)

So for the sake of this thought experiment: $1000 is a level I consider not completely impossible for a short dip without fundamental reasons, but still recoverable due to the psychological weight of that level.

Now to the problem of the security budget:

If Bitcoin's price stays at $1000 for a prolonged time, then it may lead to problems indeed, as the security budget would be then only as low as in the 2015 dip when the price was at $125 (because the block reward back then was 8x the current level, and after the 2016 halving it mostly stood >$500). Security was okay back then, but the difference would be an enormous supply of old mining hardware in that situation, which would make an 51% attack easier.

But if $1000 is only a short-term bottom of the crash, like I argued earlier in this post, then the moving average for the year may be closer to 5,000-10,000$. And that's levels we have seen only 4 years ago (6 years ago we saw even $4000), without any security problems.

This type of "thought experiments" are there to make it look like something is possible when it's not. Le me give you a thought experiment , what if I could be the king of the moon? There are no people on the moon, there is nothing to gain, no farmlands, what would I gain from it? Aside from a title? So are we writing a fantasy fiction novel now? We are not, so both questions are silly and not making any sense.

That thought experiment is modeled after a real occurrence: altcoin crashes, e.g. Solana's 95% crash in 2022. Or Zcash's 97% crash.

If there is a requirement for a serious answer, then my answer is that if the price starts to drop that much, I would sell all my belongings, my house, my car, and even take as much loan as I can and buy as much bitcoin as I possibly can. Because if there is nothing fundamentally wrong, then it will recover. But we all know, if there is nothing fundamentally wrong, then there is no way it would go that low.

Some questions:

Would you already sell your house when it drops to $5000?
What would you do if just after, it would drop to $3000 or even $2000?
You'd probably devastated and perhaps waiting for a $3500 spike to sell and cut your losses.

That is exactly the type of sentiment that could lead to such a crash. Several years of lower lows without substantial recovery. The 4-year cycle broken. Bitcoin would work as always, but the current level of "extreme fear" would be nothing compared to this hypothetic situation.

Only in such a situation I consider this dip possible. And I consider it useful to think about that scenario. The fundamental question is: Would we give up Bitcoin only because its price doesn't behave as we thought?

[yhiaali3]

this is a hypothetical scenario, and many unexpected things can happen.
Basically, as you mentioned, it's unlikely to drop to that price because there will always be strong demand at every dip, making it difficult for Bitcoin to fall to $1,000.

Let's suppose that, for some reason, there wasn't strong demand at the dip, or that selling pressure was stronger than buying pressure, and the price continued to fall to $1,000 and stabilized there. At that point, many people or companies would consider buying because it would be a great opportunity that wouldn't be repeated, and strong buying pressure would begin to push the price up.

Another possibility, which I consider unlikely, is that since Bitcoin has fallen so drastically, it will lose confidence, and no one will buy. In that case, yes, there won't be a rise; in fact, there might be further declines.

This type of "thought experiments" are there to make it look like something is possible when it's not. Le me give you a thought experiment , what if I could be the king of the moon? There are no people on the moon, there is nothing to gain, no farmlands, what would I gain from it? Aside from a title? So are we writing a fantasy fiction novel now? We are not, so both questions are silly and not making any sense.

If there is a requirement for a serious answer, then my answer is that if the price starts to drop that much, I would sell all my belongings, my house, my car, and even take as much loan as I can and buy as much bitcoin as I possibly can. Because if there is nothing fundamentally wrong, then it will recover. But we all know, if there is nothing fundamentally wrong, then there is no way it would go that low.

Yes, it is just a thought experiment and may not mean anything, but I see it as testing the extent of people’s belief in Bitcoin. In other words, if the price drops by more than 99%, will people still believe in Bitcoin or will they abandon it, considering it to have become a worthless asset?

Personally, I would do the same as you. I would sell all my possessions and buy Bitcoin and wait for the price to recover because I believe that - unless something goes wrong - no matter how low the price goes, it will recover again.

[m2017]

[Trigger warning / Disclaimer] This is only a speculative horror fairytaile  It's not something I consider likely (not completely impossible, but less than 1% likelihood).

The probability of this is equal to thousandths or hundreds of thousandths of a percent.

What, if purely by forces of speculation and panic selling, but without a fundamental reason like a bug or quantum computing, Bitcoin takes a massive dip which erases more than 95% of its value, letting it fall as low as $1000 or so?

This will cause massive panic and a chain reaction of events. The consequences will likely also affect the traditional stock market.

Would Bitcoin recover?

$1,000 is not $10. Recovery will take a long time, as trust will not be restored anytime soon.
 

Why? Because Bitcoin's value proposition of the most secure and active decentralized payment network has not changed.

Absolutely right. No matter how much a bitcoin costs, $1 or $1,000, it's still a bitcoin. Everything continues to work exactly the same. It's just our subjective judgment of the bitcoin's value that changes. In other words, 1 btc is always equal to 1 btc, and everything else is just an abstract entity.

This is of course possible if and only if:

- There is no other decentralized cryptocurrency which took Bitcoin's place and its competition was the main reason for the crash.

I don't think there is an alternative crypto that would be preferable to bitcoin.

- There are no major bans or extremely harsh regulations.

This could seriously damage the future of bitcoin, but I don't think it's likely to happen in every country in the world. I suspect most countries will still be loyal to bitcoin (and collect taxes from users). This means that a ban or criminal liability will not be able to lower the price so much ($1000).

[philipma1957]

I’m also one of those who once fantasized that btc could crash. But I know the chances of that happening are very low. If it did crash hard, a lot of people would panic and start doubting the future of btc and the entire crypto space. However, just as there would be doubt, there would also be people who see it as a buying opportunity instead of panicking. Those who missed the train before probably wouldn’t miss the chance again to get on board. A recovery would likely need strong buyers. If people see whales buying again, it could trigger FOMO, and others would follow. That kind of chain reaction could push the market back up. Someone like Elon Musk probably wouldn’t miss that opportunity either. With his influence, confidence in crypto could gradually return. Whether it takes a short time or a long time, I believe it would eventually recover.

dropping from 69k to 15.9k was a crash for sure.

dropping from 126k to 63k is an obvious manipulation of price.


but the problem is price did get manipulated this time.


so we know it can come back from

75% drops
and 80% drops