Peter Brandt, a longtime trader considered a legend by many, is offering a fresh take on how we think about market crashes, drawing an unexpected comparison between the wild swings in Bitcoin (BTC) and one of the most famous downturns in U.S. stock market history.
According to Brandt, the crash of the Dow Jones Industrial Average (DJIA) in the early 1930s - often pointed to as the ultimate example of a bear market - might not be as unique as many assume.
Back then, during the Great Depression, the Dow fell more than 80% from its highs, a level of decline that has since become the benchmark for what a “real” crash looks like. But Brandt is questioning whether it still makes sense to treat that drop as the gold standard.
He pointed out that Bitcoin has actually gone through four similar declines since 2011 - each one wiping out more than 80% of its value - yet the crypto market keeps coming back.
While the professionals often see Bitcoin as an unpredictable, high-risk investment, Brandt's view puts those crashes in a more familiar context. Instead of thinking that Bitcoin's volatility is something totally new and chaotic, he says it is following a pattern similar to what was seen before, just in a different time and market.
The chart Brandt references shows the dramatic rise and fall of the Dow from 1928 to 1933, with a clear head-and-shoulders top before the big drop, eventually hitting a bottom at around 40.56. It took the market years to recover, and the recovery looked a lot like Bitcoin's after each of its major downturns.
When Brandt brings up this comparison, he is not saying BTC is exactly like the Dow. He is saying that extreme drawdowns do not automatically mean an asset is a bad investment. They might actually be part of the process, especially in new or fast-evolving markets.
Vladislav Sopov
Dan Burgin