It keeps coming back.

By Jeff John Roberts
September 18, 2017

September has been a wild ride for bitcoin owners: the digital currency began the month nudging an all-time high of $5,000 before losing nearly 40% of its value in a spectacular crash. Now, a recovery has seen bitcoin pop back over $4,000 as of Monday morning.

To put this in context, Fortune offers a closer look at this month’s crash and four other major price shocks—as well as likely explanations for all of them. Taken together, this account can provide some insight into why bitcoin is so volatile, and whether it can survive in the long run.

(The data is from the Winkelvoss index, which blends prices from different exchanges. Note this survey doesn’t include crashes from the early days of bitcoin, which journalist Tim Lee recounts here).

The Meltdown of April 2013

What happened: In the spring of 2013, a ghastly collapse saw the price of bitcoin fall from $233 to $67—overnight! That’s a 71% drop. It would take seven months to recover.

Windex

Why it happened: The crash of April 2013 came after bitcoin’s first big brush with the mainstream. The currency had never crossed $30 before 2013 but a flood of media coverage helped drive it well above $200. The crash, which followed two smaller jolts in March, reflected in part a correction to speculator exuberance. Some also attribute it to an outage at Mt. Gox, the most popular (at the time) exchange for buying and selling bitcoin.

Pop Goes the 2013 Bubble

What happened: Bitcoin spent most of the rest of 2013 around $120. Then prices jumped ten-fold in the fall: Bitcoin hit a high of $1,150 in late November and then the party ended abruptly, and prices tumbled below $500 by mid-December. It would take more than for years for bitcoin to reach $1,000 again.

Windex

Why it happened: The crazy price run up of late 2013 appears to have been a classic bubble as amateur investors rushed into bitcoin for the first time. The frenzy was helped by regulators taking a more positive view of bitcoin (in the early years, most regarded it as criminal—if they had heard of it at all), and by U.S. exchanges like Coinbase that made it easier for average people to buy bitcoin. When the bubble popped, prices would likely have recovered more quickly but for what happened next.

The Mt. Gox Calamity of 2014

What happened: The price of bitcoin had been making big gains after the bubble pop of 2013 when, in February, the price fell from $867 to $439 (a 49% drop). This triggered a doldrums period for bitcoin that lasted until late 2016.

Winkdex

Why it happened: The February crash came after the operator of Mt. Gox—long the go-to trading place for longtime bitcoin owners—announced the exchange had been hacked. On February 7, the exchange halted withdrawals, and later revealed thieves had made off with 850,000 bitcoins (which would be worth around $3.5 billion today). The incident, which created existential doubts about the security of bitcoin and undercut liquidity in the currency, likely harmed the currency’s value for years.

Summer Selloff of 2017

What happened: Fast forward to the go-go days of 2017. In early January, bitcoin broke $1,000 for the first time in years and started climbing like crazy. By June, the currency nudged $3,000—but then lurched back all of a sudden, falling 36% to $1,869 by mid-July.

Winkdex

Why it happened: Even as bitcoin boomed anew, many worried something was wrong with the code under the hood. Specifically, bitcoin was slow compared to other crypto-currencies like Litecoin and Ethereum, and its core developers couldn’t come to an agreement on how to update the software. This raised the prospect of a “fork” (which would produce two versions of bitcoin’s canonical blockchain) and future schisms, which in turn appeared to give rise to market jitters and the big fall in price. Ironically, such a fork did materialize in August in the form of rival Bitcoin Cash—but this seems to have done no longterm harm to bitcoin.

The Great China Chill

What happened: After fears over the fork subsided, bitcoin went on another crazy tear: It climbed close to $5,000 at the start of September before plunging 37% by September 15, shaving off over $30 billion from bitcoin’s total market cap in the process. A recovery is already underway, though, as prices climbed above $4,000 three days later.

Winkdex

Why it happened: While bitcoin price moves can be inscrutable, the prime reason for the latest crash can be summed up in one word: China. After it cracked down on so-called “Initial Coin Offerings,” there have been widespread rumors the Communist government is going to ban trading crypto-currency altogether. In response, the most prominent exchange, BTCChina, said it will end trading this month. This crackdown, combined with questions about China’s de facto monopoly on bitcoin mining, explains the recent price swoon.

Lessons Learned From 5 Crashes

A look back at bitcoin price swings in the last five years, which include several stomach-churning tumbles of 40% and even 50%, makes it clear the world’s most popular crypto-currency was—and is—extremely volatile.

It’s also apparent that most of the bitcoin crashes coincide with speculative run-ups coupled with exogenous shocks, such as a major hack or a government crackdown. Also, in most cases, bitcoin has bounced back from the crashes in months or even weeks—suggesting nervous bitcoin buyers will be okay if they are holding for the long run. On the other hand, the crashes of late 2013 and early 2014 are a cautionary tale—recall it took years for those who first bought bitcoin at $1,000 to see their investment recover.

As for whether bitcoin could fall all the way to $5, note how Lee (who wrote an earlier history of bitcoin crashes) said in 2013 “it’s simply too early to tell.” Today, the crytpo-currency market is so much bigger, and has proved so resilient, it appears a safe bet that bitcoin’s floor price will always be well above $5.

The question now, for investors, is to choose a narrative that explains bitcoin’s longterm place in the world: Should they take the view bitcoin is nothing more than niche—or, in Jamie Dimon’s view, a modern-day version of tulip bulbs? (If so, they can short it). Or should they take the view, espoused by Bloomberg View columnist Mohamed A. El-Erian, that bitcoin and other cryptoassets are now a permanent part of the invest landscape and will have a role alongside precious metals as longterm sources of value? Either outcome seems plausible—and so does a future crash.

An earlier version of this story incorrectly stated bitcoin had never crossed $15 before 2013. It hit $29 in 2011. (h/t @markosp)

This is part of Fortune’s new initiative, The Ledger, a trusted news source at the intersection of tech and finance. For more on The Ledger, click here.

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