Celebrating 80% price drawdowns, crypto’s most thrilling tradition

Crypto has a few traditions going for it — including massive drawdowns after all-time highs.

Companies and startups regularly wage war with the SEC. The degens pump obscure digital novelties to sky-high valuations. And, after practically every top, token prices collapse by 80% or more.

The chart below sorts top cryptocurrencies by the date they last reached all-time high. Each dot is a different token, and they obviously concentrate around the tops of the past three cycles, in 2018, 2021 and 2024.

Dots to the right of the chart hit record highs most recently, while the ones on the left were much longer ago.

Coins gathered at the top have corrected the most — those at the very edge have lost practically all of their value compared to their all-time highs.

More than a dozen of the analyzed cryptocurrencies that set price records this cycle have already had their 80% drawdowns, including AEVO, STRK, WLD, W, ENA, DYM and DYDX.

Around three quarters have lost over 60%. As is tradition.

The blue chips also carry that particular torch. Bitcoin has re-traced by that amount (or more) three times since 2017 and ether has done it twice, although the latter has been much quicker about it.

*Notice that ether has already retraced by 40% from this cycle’s peak*

The real trick is bouncing back even stronger from these sustained corrections. The list of top 200 or so cryptocurrencies is littered with tokens that never returned to record highs — including even ether and solana.

This next chart plots tokens that made it to one’s that are still fighting over the past seven years. SOL, ETH and MATIC are the faded lines in the back. Those made it between cycles, even though MATIC is now struggling by comparison.

In the front are former top 10 cryptocurrencies that have largely missed out: IOTA, DOT, EOS and DASH.

All this is a reflection of crypto’s volatility. Cryptocurrencies may or may not run back their 80% corrections, but either way, they’re — apparently — pretty much inevitable.

For what it’s worth, bitcoin usually bottoms out between 350 and 400 days after peaking, while ether has done it in just over 200 at the shortest and under 350 days at the longest.

And we’re currently at around 200 days since bitcoin’s pico top. Whether that was also the top for the entire cycle is however another story.

A modified version of this article first appeared in the daily Empire newsletter. Subscribe here so you don’t miss tomorrow’s edition.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.