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Crypto from scratch, in five steps.

In about 10 minutes you'll understand what bitcoin is, why its price goes up and down so much, what happened in its worst drops and why nobody knows what comes next. All with prices that actually happened.

Step 1

What bitcoin is

Bitcoin is digital money. No bank or government issues it: it works thanks to thousands of computers around the world that together keep a record of who owns how much. There will never be more than 21 million bitcoins. And since a whole one costs a lot, you can buy just a part: each bitcoin splits into 100 million parts, called sats.

Try it yourself

Today one bitcoin costs $79,950. But it can be split: look at what's inside, 100 parts at a time.

  1. 1 bitcoin

    100,000,000 sats ≈ $79,950

    Each square is 1 of its 100 parts: 1,000,000 sats, about $799.

  2. 1,000,000 sats

    ≈ $799

    Each square is 1 of its 100 parts: 10,000 sats, about $7.99.

  3. 10,000 sats

    ≈ $7.99

    Each square is 1 of its 100 parts: 100 sats, about $0.080.

  4. 100 sats

    ≈ $0.080

    Each square is 1 of its 100 parts: 1 sat, about $0.00080.

  5. 1 sat

    ≈ $0.00080

    The smallest part of a bitcoin. It can't be split any further.

From 1 bitcoin to 1 sat there are four jumps of 100. That's why nobody needs to buy a whole bitcoin: $10 would get you about 12,508 sats today.

With bitcoin's price on October 26, 2026: $79,950.

Question Do you need to buy a whole bitcoin?

One bitcoin is 100 million sats, so you can own just a part. Today, $10 would get you about 12,508 sats.

Done. One step down, and you already know more than five minutes ago. Next: Why it goes up and down so much

Step 2

Why it goes up and down so much

Bitcoin's price is whatever someone is willing to pay for it at any given moment. There's no company with profits or interest payments behind it: the price depends mostly on what people expect to happen, and that changes fast. That's why it goes up and down much more than the stock market. How much a price goes up and down is called volatility.

Try it yourself

These two paths are real and lasted two years. Both start at $100 and end near $140. Imagine your money is in one of them: which one would you rather live through?

Path A

Highest: $306 · lowest: $50

Path B

Highest: $140 · lowest: $100

You chose the path that moves the most. The good part: at times it was worth $306. The hard part: at other times it was worth $50: it fell as much as 84%. Anyone who sold there out of fear ended up with $50, not $140.

You chose the calm path. The good part: the worst it did was drop 8%, much easier to live with. The hard part: calm doesn't mean risk-free: the S&P 500 has also fallen 50% from October 2007, and it took 4 years and 4 months to come back.

A was bitcoin, between October 2017 and October 2019. B was the S&P 500, the US stock market, between August 2024 and August 2026. They ended almost the same, but the path was very different: that's volatility. It doesn't necessarily change where you end up; it changes how hard it is to hold on until the end.

Question If bitcoin rose a lot last year, what does that say about this year?

One year doesn't announce the next. Of the 11 years in which bitcoin rose more than 30%, the following year it rose again 7 times and fell 4. After rising in 2023, in 2024 it rose 121%; after rising in 2021, in 2022 it fell 64%.

Next: Historic drops and recoveries

Step 3

Historic drops and recoveries

Bitcoin has had huge drops. Since 2011 it has fallen 70% or more from its highest price five times. Every time it went back above that price, but it took between 7 months and 3 years and 2 months, and nothing guarantees it will happen again. Today it's 36% below its highest price, which was in October 2025.

Try it yourself

An example with round numbers: you start with 100, whether that's dollars, bitcoins or sats. Move the bar to choose how much it falls, and see how much it would then have to rise to get back to 100.

50 out of every 100 are left

To get back to 100 it has to multiply by 2: rise +100%.

The big drops and how long they took to recover

AssetPeakBottomDropBack at the peakTime below the peak
BitcoinJun 2011Nov 2011−93%Feb 20131 year and 8 months
BitcoinApr 2013Jul 2013−71%Nov 20137 months
BitcoinDec 2013Jan 2015−85%Feb 20173 years and 2 months
BitcoinDec 2017Dec 2018−84%Nov 20202 years and 11 months
BitcoinNov 2021Nov 2022−77%Mar 20242 years and 4 months
S&P 500Aug 1929Jun 1932−84%Jan 194515 years and 5 months
S&P 500Dec 1972Sep 1974−47%Dec 19764 years
S&P 500Aug 2000Sep 2002−45%Oct 20066 years and 2 months
S&P 500Oct 2007Feb 2009−50%Feb 20124 years and 4 months

Bitcoin: drops of more than 70% since 2011, with daily prices. S&P 500: drops of more than 40% since 1926, with monthly data and dividends.

Bitcoin's big drops, side by side

Each drawing starts at the highest price and runs until the price got back to it. Deeper: it fell more. Longer: it took longer to come back.

  1. 2011 → 2013

    −93%

    Came back in 1 year and 8 months

  2. 2013

    −71%

    Came back in 7 months

  3. 2013 → 2017

    −85%

    Came back in 3 years and 2 months

  4. 2017 → 2020

    −84%

    Came back in 2 years and 11 months

  5. 2021 → 2024

    −77%

    Came back in 2 years and 4 months

  6. Since Oct 2025

    −36%

    Not back yet

Drops of 70% or more since 2011, with daily prices, all on the same scale. The last one, if shown, is today's. That a drop has happened before doesn't tell you when the next one comes.

Question If something falls 50%, how much does it have to rise to get back?

If 100 falls to 50, it has to gain 50 to get back to 100, and 50 is 100% of 50. That's why drops weigh more than they seem.

Next: Buying little by little

Step 4

Buying little by little

Nobody knows the best day to buy. That's why some people, instead of buying everything at once, buy a little every month, always the same amount. That way they don't depend on picking the right day. It doesn't always work out better: sometimes buying all at once wins, sometimes buying little by little does.

Try it yourself

Two ways to put $1,200 into bitcoin over a year: all at once in January, or $100 every month. Pick a real year and see how many sats each month bought.

Year

Sats that $100 bought each month

When the price fell, the same $100 bought more sats; when it rose, fewer. In 2022, the month that bought the most was December (605,173 sats) and the one that bought the least, March (219,480).

What the $1,200 was worth at the end of 2022

All at once in January
$516
$100 every month
$814

In 2022, buying little by little did better.

Try other years: in some one way wins, in others the other. Since nobody knows in advance how the year will go, buying little by little keeps you from depending on getting the timing right. Monthly closing prices, no fees.

Try your own date in One dollar a day

Question Does buying a little every month guarantee a gain?

No way of buying guarantees a gain. Buying little by little spreads the risk of getting in right before a drop, but if the price falls and doesn't recover, you still lose.

Next: Nobody knows the future

Step 5

Nobody knows the future

Bitcoin has moved in cycles of about four years: it rises a lot, falls hard and rises again. But the cycles don't repeat exactly: each one rose much less than the one before. Looking at the past helps you understand, but it can't tell you what comes next.

Try it yourself

If you'd put $100 into bitcoin at the lowest point of each cycle, this is what you would have had at its highest point:

  1. Cycle 1 · Nov 2011 → Dec 2013

    $53,914

    It multiplied by 539

    Then it fell 85%

  2. Cycle 2 · Jan 2015 → Dec 2017

    $11,182

    It multiplied by 112

    Then it fell 84%

  3. Cycle 3 · Dec 2018 → Nov 2021

    $2,121

    It multiplied by 21

    Then it fell 77%

  4. Cycle 4 · Nov 2022 → Oct 2025

    $792

    It multiplied by 7.9

    Since that point, until today: −36%

Each cycle multiplied much less than the one before: by 539, 112, 21 and 7.9. And every high point except the last one was followed by a drop of more than 75%. What will the next one look like? Nobody knows.

This is the best possible case: nobody buys exactly at the lowest point or sells exactly at the highest. Each cycle runs from the bottom of a drop of 75% or more to the highest price that came after, with daily prices since 2010. For the last cycle, we don't know yet whether that was its highest point.

Question If each cycle rose less than the one before, what will happen in the next one?

It could rise less, more, or there may be no new cycle at all. That's why Compass shows what happened and doesn't say what will happen: that decision is yours.

See what you learned

What you learned

  1. You can buy part of a bitcoin. The smallest part is a sat, and one bitcoin has 100 million of them.
  2. Its price goes up and down much more than the stock market. That's called volatility, and the hard part is living with it.
  3. Since 2011 it has fallen 70% or more five times. It always came back to its highest price, but it took up to 3 years and 2 months, and nothing guarantees it will happen again.
  4. Buying a little every month keeps you from depending on picking the right day, but it doesn't guarantee a gain.
  5. Each cycle rose much less than the one before. What comes next, nobody knows.

What now?

To go deeper: the Simulator, with bitcoin, ethereum and the stock market

Compass makes nothing if you buy, and none of this is a recommendation. It's so that, if you ever decide, you decide with information.

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Calculated and reviewed by Compass. Sources, checks and method

Figures with data as of October 26, 2026. Educational content. Not financial advice. Past results don't guarantee future results.