Recently, I looked into the history of major declines in the US stock market over the past century. By comparing the magnitude of drops and the time it took to recover across different periods, I found a very interesting shift. Combined with today’s crypto market, it also offers many practical references for cryptocurrency investors.

First, let’s go through the typical major downturns in each era. In 1907, the market fell into panic, with the index pulling back 48%, and it took a full decade to return to the previous highs. The Great Depression of 1929 is a widely recognized crisis at the historical level, with a plunge of as much as 89%, taking 25 years for a complete recovery. In 1973, affected by the oil crisis, US stocks dropped 45%, and it took nine years to slowly climb out of the trough.

By the middle and later stages, things began to gradually change. In 1987’s “Black Monday,” the crash struck suddenly: the market fell 36%, and it recovered within two years. In 2000, the burst of the internet bubble drove the broader market down 78%, and it took 13 years to return to high levels. In 2008, the global financial crisis erupted; the stock index fell 57%, and the adjustment ended in five and a half years.

In recent years, the market’s resilience has been especially visible. In 2020, the pandemic triggered a short-term flash crash, with a 34% decline, and it rebounded to where it needed to be in just half a year. In 2022, the global interest-rate hike cycle arrived; the index fell 27%, and the recovery was completed in 18 months. In 2025, the market saw phase-based volatility: a 23% drop, and all losses were recovered within a month and a half.

Putting these figures together makes the trend clear: after the US stock market experiences a sharp pullback, the pace of recovery keeps getting faster, and the overall magnitude of the decline is also gradually narrowing. As the financial system keeps improving and policy tools become more mature, the market’s ability to withstand risk is very different from how it was before. From a value-investing perspective, once the US stock market sees a deep correction of 20% or more, it’s actually a fairly good time to enter.

Many people may wonder—what does the US stock market’s performance have to do with the crypto market? In fact, the connection is very close. The crypto market is particularly sensitive to global liquidity and market risk-avoidance sentiment. As a bellwether for global capital markets, the rise and fall of the US stock market often directly drives synchronous volatility in the crypto market.

In the past, a US bear market could last for years, and the crypto market would also endure a prolonged period of sluggish trading and bottoming out, resulting in a poor experience for holders. But it’s different now. The adjustment cycle in the US stock market has been shortened significantly, which means the phase of tightening liquidity and the spread of pessimism won’t last as long.

When you run into another deep correction in the US stock market in the future—one that subsequently leads to crypto prices collectively dipping lower—you actually don’t need to be overly anxious. Most of these declines are caused by short-term sentiment and liquidity fluctuations, not a sustained weakening of the long-term trend. With shorter adjustment cycles, rebounds naturally come faster too.

Understanding this historical pattern can help us avoid the mistakes of chasing rallies and panic selling. It also makes it easier to approach market volatility rationally and to seize opportunities for positioning that appear during pullbacks. #分享美股交易赢英伟达股票

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

1 Likes