The Coinbase Lesson on Buying Bitcoin in a Bear Market

Back in 2018, one statistic cut through the gloom of a brutal crypto winter. Despite the market shedding most of its value across the year, Coinbase was still one of the busiest on-ramps in the industry. The figure was eye-catching, but the lesson behind it has aged far better than the number itself, and it still explains why experienced investors buy Bitcoin in a bear market today.

Key takeaways

• At the Bloomberg Players Technology Summit on 14 August 2018, Coinbase chief executive Brian Armstrong said sign-ups had grown from about 500 a day in 2012 to roughly 50,000 a day at the 2017 peak.
• Bitcoin traded near US$6,120 in August 2018, about 70 percent below its December 2017 high of close to US$20,000, yet new accounts kept opening.
• Seasoned investors buy Bitcoin during downturns to build a position before the next cycle, a behaviour tied to Bitcoin’s roughly four year halving rhythm.
• Bitcoin mining is an alternative accumulation method that produces newly issued Bitcoin steadily through both bull and bear markets.
• Hosted Bitcoin mining lets Australians accumulate through a downturn without managing hardware, heat, or noise at home.

What Coinbase Reported at the 2018 Bloomberg Summit

At the Bloomberg Players Technology Summit on 14 August 2018, Brian Armstrong framed each boom and correction as part of a long term adoption trend rather than a reason to leave the market. He described cryptocurrency as a technology moving through a series of bubbles and corrections, with each one settling at a new and higher plateau. Real world adoption, in his view, kept climbing even when prices did not.

The progression that built the headline

Armstrong walked through Coinbase’s growth in plain numbers. The exchange signed up roughly 500 people a day when it launched in 2012, around 5,000 a day after the following cycle, and about 50,000 a day at the height of the 2017 run-up (Bloomberg, 14 August 2018). At the time he spoke, Bitcoin was trading near US$6,120, about 70 percent below its December 2017 high of close to US$20,000. Coinbase had served roughly 25 million customers and facilitated around US$150 billion in cryptocurrency trades over the prior year.

The detail worth holding onto is that the 50,000 a day peak belonged to the boom, but sign-ups did not collapse to zero when the boom ended. Adoption continued through the downturn, which tells you something about who keeps showing up when prices fall.

Why Investors Keep Buying Bitcoin When Prices Fall

The behaviour Armstrong described is not unique to Coinbase. In every Bitcoin cycle, a wave of newcomers arrives near the top, watches the correction, and leaves disappointed. A smaller, steadier group does the opposite, using the quiet years to accumulate at lower prices.

Accumulation beats timing

Lower prices mean more Bitcoin per dollar. For long term participants, a sustained downturn is not the riskiest time to buy, it is often the cheapest. Trying to pick the exact bottom is a losing game, so disciplined investors focus on accumulating steadily rather than timing a single perfect entry.

Dollar cost averaging through a downturn

Dollar cost averaging is the practice of investing a fixed amount at regular intervals regardless of price, which smooths out volatility and removes the pressure of calling the market. It is why exchange sign-ups and on-chain accumulation often hold up during bear markets even as headlines turn grim. The people entering are not chasing a rally, they are positioning for the one they expect later.

How the Four Year Halving Cycle Drives Bear Markets

Bitcoin’s issuance is governed by code, not sentiment. Roughly every four years the block reward halves, cutting the rate at which new Bitcoin enters circulation. This event is called the halving, and it is the structural reason the market keeps moving in cycles.

Halvings have occurred in 2012, 2016, 2020, and April 2024 (Bitcoin.org; halving data via mempool.space). Each one has historically been followed by a run-up, a correction, and a plateau, which is the same pattern Armstrong gestured at in 2018. Once you see the cycle, a downturn looks less like the end of an asset and more like the part of the cycle where accumulation is cheapest. The halving rhythm is the structural reason bear markets keep attracting buyers rather than only sellers.

Bitcoin Mining as a Bear Market Accumulation Strategy

Buying on an exchange is one way to accumulate. Bitcoin Mining is another, and it behaves differently through a downturn. A miner running efficient hardware earns a flow of newly issued Bitcoin every day the machine is online, regardless of whether the market is euphoric or fearful.

Buying Bitcoin versus mining it

The two approaches build a position in very different ways. Buying depends on having spare capital at the right moment. Mining builds a position on a schedule, which suits investors who want to accumulate steadily through an entire cycle.

An ASIC miner, short for Application-Specific Integrated Circuit, is hardware built to do one job, computing Bitcoin’s SHA-256 hashing as efficiently as possible. The current generation, such as the Bitmain Antminer S21 series, is far more productive than older machines, which matters when network difficulty keeps rising.

Why hosted mining suits Australian conditions

Hosted mining, also called colocation, means your hardware runs in a professional data centre that manages power, cooling, security, and maintenance. You accumulate Bitcoin without running noisy, power-hungry machines at home. In a bear market, when many people sell, a miner with a low electricity rate can keep accumulating at a known cost base, which is exactly the disciplined accumulation the 2018 Coinbase data pointed to.

What This Means for Australian Bitcoin Investors

The 2018 lesson translates cleanly to an Australian context, but the method has to fit local conditions. Two numbers decide whether mining makes sense here: your electricity rate and your tax position.

Residential power in much of Australia is expensive enough that home mining rarely works at scale, which is why most serious Australian miners host their hardware where power is cheaper. On tax, the Australian Taxation Office treats cryptocurrency mining differently depending on whether you mine as a hobby or as a business, and business mining income is generally assessed as ordinary income (ato.gov.au). The rules are specific to your circumstances, so this article does not provide tax calculations. For tailored advice, speak to a licensed professional and refer to current ATO guidance.

For Australians, accumulating Bitcoin through a downturn comes down to those two numbers, and hosted mining addresses the electricity side directly.

How Mining Store Australia Helps You Accumulate Bitcoin Through Any Market

The Coinbase story from 2018 carries a lesson that has held through every cycle since. Adoption keeps climbing across booms and corrections, downturns are when experienced investors quietly accumulate, and Bitcoin’s four year halving rhythm is the structural reason the pattern repeats. The practical question is not whether to accumulate, but how to do it on terms that survive a full cycle.

This is where Mining Store Australia fits. As Australia’s number-one Bitcoin mining hardware supplier and a Melbourne-based Bitcoin mining specialist founded by Bitcoin miners William Wright and Callum Cameron, Mining Store has helped more than 6,000 Australian clients since 2016. You can browse the latest ASIC miners for sale, including the Bitmain Antminer range, and arrange hosted Bitcoin mining at the crypto mining hosting facilities so you accumulate newly issued Bitcoin without managing power, heat, or noise yourself. If you want to learn the fundamentals first, the Mining Store Australia blog covers everything from choosing a first miner to building topical knowledge of mining pools and profitability.

Ready to plan your accumulation strategy before the next cycle turns? Book a free consultation with the Melbourne team, call 1300 644 978, or email [email protected]. The team can match the right ASIC hardware and hosting setup to your goals, so you can put the bear market accumulation lesson to work.

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