The global outbreak of the COVID-19 pandemic in early 2020 delivered a massive shock to the world economy. Within two months, U.S. markets saw four separate trading halts, oil futures crashed into negative territory, and gold—long considered a safe-haven asset—plummeted from $1,700 to $1,500, undermining its reputation as a store of value. Prominent investors were not spared: Ray Dalio’s Bridgewater fund was rumored to be on the brink of collapse, and Warren Buffett’s value-investing strategy appeared to falter as Berkshire Hathaway reported a net loss of nearly $50 billion in the first quarter. Fear was widespread.
During this period of rapid asset devaluation, Bitcoin was no exception. March 12, in particular, stands out as a day of extreme panic for investors. On that day, both U.S. stocks and Bitcoin experienced severe declines. The Dow Jones Industrial Average fell by 9.99%, its largest single-day drop since October 1987. Meanwhile, Bitcoin’s price tumbled from around $8,000 to approximately $5,500, and by the following day, it had hit a low of $3,791—a two-day collapse of more than 52%.
One year later, as we approach the anniversary of that event, Bitcoin’s price has surged by over 1,300%, reaching a previously unimaginable level of $55,000. What once seemed like an audacious prediction has become reality. Yet, even as Bitcoin achieves new heights, the shadow of the March 12 crash still looms, and opinions about its future are deeply divided.
Some believe that such a crash will happen again, especially given the continued uncertainty around the pandemic and global political tensions. Others argue that we are in the midst of a structural bull market, one that could be larger and more sustained than any before, precisely because it is being driven not by retail speculation, but by institutional adoption. In an era of unprecedented monetary expansion, with more corporations and investment funds entering the space, $55,000 may only be the beginning.
This article reflects on the profound changes Bitcoin has undergone over the past year and considers what may lie ahead.
Bitcoin’s Journey Since the March 12 Crash
On March 15, 2020, the U.S. Federal Reserve announced an emergency measure: cutting the benchmark interest rate by 100 basis points to a range of 0% to 0.25%. It also launched a new quantitative easing program worth $700 billion. This was the second emergency rate cut in just weeks, following a 50-basis-point reduction on March 3. Such aggressive monetary intervention was highly unusual. Central banks around the world—including those in the U.K., Canada, and Australia—soon followed with their own rate cuts and stimulus packages.
On March 27, then-President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion economic stimulus bill—the largest in U.S. history. Against this backdrop of massive liquidity injection, global markets began to stabilize and recover. Bitcoin, too, started its dramatic ascent.
By May 12, 2020, Bitcoin underwent its third halving, reducing the block reward from 12.5 BTC to 6.25 BTC and pushing its annual inflation rate below 2%. At the time of the halving, Bitcoin was trading near $8,900.
The following month, on June 15, decentralized finance (DeFi) protocols like Compound and Balancer introduced liquidity mining, sparking a wave of innovation and speculation that drew even more attention—and capital—into the crypto space.
A significant regulatory milestone was reached on July 24 when the U.S. Office of the Comptroller of the Currency (OCC) authorized national banks to provide cryptocurrency custody services. Bitcoin’s price responded with a 10-day winning streak starting July 20, climbing from $9,120 to over $11,000—a gain of more than 20%.
In November, positive news around the U.S. presidential election and COVID-19 vaccine development provided further momentum. By the end of the month, Bitcoin had risen 40.8%, closing near $13,000.
December brought more institutional validation. S&P Dow Jones Indices announced it would launch cryptocurrency indexes in 2021 in partnership with data provider Lukka. Bitcoin broke its previous all-time high, reaching $20,000 for the first time. Before the year ended, President Trump signed a new $900 billion coronavirus relief bill.
Bitcoin’s bullish momentum continued into 2021. On January 15, President-elect Joe Biden unveiled a $1.9 trillion stimulus plan, which was formally approved on March 7. This further supported the argument that macro liquidity would continue to drive asset appreciation.
As of March 11, 2021, Bitcoin was trading above $55,000—up 87.6% since the beginning of the year. Its market capitalization once again surpassed $1 trillion. With six consecutive months of green monthly candles, Bitcoin’s performance has been extraordinary.
Yet seasoned investors advise caution. Cathie Wood, CEO of ARK Invest, remarked that “when things are going really well, that’s when you need to be extra cautious.” Data from Bybt shows that Bitcoin’s open interest recently reached a new all-time high of over $20 billion. The last time open interest peaked, in late February, Bitcoin’s price corrected by nearly 25% in just one week. With the emotional weight of the March 12 anniversary, the short-term outlook remains uncertain.
Institutional Adoption: A New Narrative for Bitcoin
What has fundamentally changed over the past year is Bitcoin’s investment thesis. No longer solely a retail-driven speculative asset, it is increasingly viewed as a treasury reserve asset and inflation hedge by corporations and institutions.
On April 18, 2020, Renaissance Technologies’ Medallion Fund received approval to trade Bitcoin futures on the CME. In early May, legendary hedge fund manager Paul Tudor Jones publicly announced that he had allocated 1–2% of his assets to Bitcoin, calling it “a great speculation.”
In August, MicroStrategy CEO Michael Saylor revealed that his company had purchased $250 million worth of Bitcoin as part of a new treasury strategy. The firm continued to accumulate Bitcoin throughout the year. As of March 11, 2021, MicroStrategy holds 91,064 BTC, purchased at a total cost of $2.196 billion. At current prices, that position is worth nearly $5 billion.
Other institutions soon followed. In October, asset management firm Stone Ridge acquired 10,000 BTC through NYDIG. The following month, billionaire investor Stanley Druckenmiller announced he too was holding Bitcoin.
In December, Pendal Group, an Australian investment manager with $100 billion in assets, began trading Bitcoin futures. Around the same time, MassMutual purchased $100 million in Bitcoin for its investment accounts.
Perhaps the most attention-grabbing entry came from Tesla. After CEO Elon Musk expressed interest in converting the company’s cash reserves into Bitcoin, the electric car maker disclosed in February 2021 that it had bought $1.5 billion worth of Bitcoin and would soon accept it as payment.
Traditional finance is also warming to crypto. Goldman Sachs announced it would offer Bitcoin futures trading to clients, and BlackRock, the world’s largest asset manager, filed with the SEC indicating it might buy Bitcoin futures through certain funds.
Cathie Wood of ARK Invest has been a vocal proponent, suggesting that if all corporations allocated 10% of their cash to Bitcoin, its price could increase by over $200,000.
Square, another publicly traded company, doubled down on its Bitcoin bet, purchasing an additional $170 million worth in February 2021. According to Bitcoin Treasuries, 25 publicly listed companies now hold a combined 178,800 BTC worth over $9.7 billion.
Retail adoption is also expanding. In October 2020, PayPal announced it would allow users to buy, sell, and hold cryptocurrencies. By November, the service was available to all eligible U.S. users. Mastercard followed suit, revealing plans to support cryptocurrency payments for merchants in 2021.
Another milestone was the launch of North America’s first Bitcoin ETF. The Purpose Bitcoin ETF began trading in Canada in February 2021 and already holds over 12,000 BTC.
Many analysts now believe Bitcoin is beginning to compete with gold as a store of value. J.P. Morgan strategists noted in December that the rise of cryptocurrencies has come at the expense of gold. Former Federal Reserve Governor Kevin Warsh stated in January that he now sees Bitcoin as “the new gold.” A recent Citi report went even further, suggesting Bitcoin could become the “currency of choice” for international trade within seven years.
According to a Goldman Sachs report, Bitcoin has outperformed all major traditional asset classes year-to-date, with a return of approximately 70%—double that of the energy sector, which came in second.
Frequently Asked Questions
What caused the Bitcoin crash on March 12, 2020?
The crash was the result of a global liquidity crisis triggered by the COVID-19 pandemic. As traditional markets collapsed, many investors sold Bitcoin to cover losses or meet margin calls, causing extreme volatility and a sharp price drop.
How has institutional adoption influenced Bitcoin’s price?
Institutional involvement has brought significant capital, credibility, and market stability. Large public companies and investment funds buying Bitcoin as a treasury asset have created a new source of demand, supporting higher price levels.
Is Bitcoin competing with gold?
Many analysts believe so. As a non-sovereign, scarce store of value, Bitcoin offers many of gold’s benefits with additional advantages like portability and divisibility. Recent inflows into Bitcoin appear to be partly coming from gold investors.
What are the risks of investing in Bitcoin today?
Despite strong momentum, Bitcoin remains volatile. Regulatory uncertainty, market cycles, and macroeconomic shifts can all impact its price. It’s important to only invest what you can afford to lose and to understand the market’s unique risks.
Can Bitcoin be used for everyday purchases?
Yes, adoption is growing. Companies like Tesla and PayPal now accept or support Bitcoin, and payment processors are making it easier for merchants to integrate crypto payments.
What is a Bitcoin ETF, and why is it important?
A Bitcoin exchange-traded fund (ETF) allows investors to gain exposure to Bitcoin without holding it directly. This provides an accessible, regulated, and familiar investment vehicle for both institutional and retail investors.
Conclusion
The past year has transformed Bitcoin from a speculative asset into a legitimate component of global finance. Driven by institutional adoption, macroeconomic trends, and growing mainstream acceptance, it has achieved unprecedented price levels and market recognition.
While the memory of March 12 serves as a reminder of the market’s volatility, the fundamental case for Bitcoin appears stronger than ever. For those looking to understand these shifts more deeply, 👉 explore real-time market analysis and educational resources to stay informed.
Whether you are bullish or cautious, one thing is clear: Bitcoin is no longer an experiment. It is an emerging asset class that continues to evolve, challenge conventions, and capture the world’s attention.