An analysis of the cost of Bitcoin and crypto going “to the moon”

During the last big Bitcoin and crypto bull run, in 2021, the slogan “to the moon”, as referred to the cost, was often spoken or written.

Something similar had actually also happened during the previous bull run, the one in 2017, but this time there were millions of people convinced that prices were really going through the roof.

“To the moon” literally means the value of cryptocurrencies going all the way to the moon, meaning prices skyrocketing.

To be fair, the original “to the moon,” the one in 2017, referred specifically to Bitcoin, Ethereum, and a handful of other top cryptocurrencies, while in 2021 it was also often associated with a slew of shitcoins whose future was presumably not particularly bright.

The cost of Bitcoin and crypto “to the moon” in 2017

The year 2017 had one king in the crypto markets, Bitcoin, along with a few queens. The main one among them was Ethereum, but XRP (Ripple) also made dreams come true.

As for Bitcoin, in the span of just twelve months the price went from $800 to nearly $20,000, an incredible +2,400% annually that has never occurred again. It is worth noting that the current price is significantly above $20,000, although it was below this threshold for months last year.

Ethereum in 2017 did even better, rising from $10 to $1,400, which is an annual gain of as much as 14,000%. ETH’s current price is also above $1,400, and last year it was again below this threshold for months.

Ripple, now called XRP, went from 6 thousandths of a dollar to $3.4, an annual gain of more than 55,000%, but its current price is well below $3.4.

From these numbers, it is easy to see why many believed prices were skyrocketing, but 2018 took away most of those gains.

Other cryptocurrencies made similar performances, but there weren’t many of them. Of those, only Bitcoin and Ethereum replicated similar performance in 2021.

“To the moon” for the cost of Bitcoin and crypto: a look at 2021

In 2021, the performance of Bitcoin and Ethereum as a percentage was lower, but there were other cryptocurrencies with similar performance.

The most resounding one was probably Shiba Inu (SHIB), whose price in one year jumped from less than a billionth of a dollar to more than 86 millionths, with percentage growth of more than a million percent.

The fact that there were so many tokens and cryptocurrencies with sky-high performance in 2021, even one or two orders of magnitude higher than in 2017, brought the slogan “to the moon” back to the forefront, despite the bear-market of 2018.

It is worth noting that several crypto assets that in 2017 were believed to be going “to the moon” in 2021 were unable to surpass the peaks of four years earlier.

The one that disappointed the most was perhaps XRP itself, although also Bitcoin Cash, Tron, Monero, and Stellar underperformed compared to the previous bull run. Others, such as Litecoin or Ethereum Classic, did not do much better, while others, such as most notably Dogecoin, seemed instead to awaken from a long slumber.

Will there be another “to the moon” period?

Should another similar bull run occur, it seems unlikely that the cryptocurrencies that performed better in percentage terms in 2021 will be able to replicate similar results.

Most likely, even those that boomed in 2017 will struggle extremely hard to replicate similar performance.

Bitcoin and Ethereum could perform as they did in 2021, namely register very significant gains, but lower in percentages than those of the previous bull run.

Instead, it is possible that it is new cryptocurrencies and tokens that will perform the best. Then again, starting from lower market capitalizations, it may be easier for them to trigger rapid and powerful growth that can cause their value to explode.

However, it is not nearly enough to have a very low market capitalization to hope for a future price boom.

It is enough to consider that several crypto assets that had low capitalization before 2021 have essentially continued to have low capitalization in 2021. Not to mention those that have even lost value since 2017.

Excess euphoria and the potential impact of FOMO

But the most important aspect is another.

Indeed, the so-called “to the moon” betrays an underlying problem: overenthusiasm.

In order to make quick and consistent gains, it is not enough to buy an asset when the price has risen and then sell it back at the highs.

First, by doing so you lose the benefits of the initial rise. Second, selling at the highs is more a matter of luck than skill.

Finally, when the price of a crypto has already risen, there is actually no guarantee that it will continue to do so. Instead, it often runs out of steam, and then begins to fall.

It is no accident that the slogan “to the moon” is trotted out just after prices have gone up, and almost never before.

In other words, many people get carried away by mere enthusiasm, without stopping for a moment to think about the fact that if a price has already gone up a lot, the chances that it might go down at that point increase exponentially.

Those who know the markets well, know how dangerous overenthusiasm is, particularly when it is combined with the hope of making a lot of money in a short time by simply buying something that is fashionable to buy at any given time.

Those who bought XRP above $3 in early 2018, for example, in the hope that its market value was skyrocketing, know this all too well, and have never seen it worth that much since.

Studying before taking action

In order to avoid falling into these pitfalls, the first essential step is to study thoroughly what cryptocurrencies are and how they work. It is necessary to pay special attention because they are all different, although shitcoins do look a bit alike.

Moreover, by necessity, it is not possible to limit oneself to studying individual cryptocurrencies, but it is important to delve very deeply into the crypto markets, within which technical knowledge of crypto projects alone cannot always help decipher investor behavior.

In essence, on the one hand there are those who act without special knowledge and expertise, often being guided mostly by emotions, and on the other hand there are those who are able to make rational and informed decisions.

Markets often behave like conveyor belts of money from the former to the latter, with the latter now having figured out all too well how to attract the former in order to convince them to hand them some of their funds.

In other words, those who buy crypto assets solely because they hope they will go “to the moon” are often just giving money away to those who sell them.