It exists in the market and will be permanently passed round between buyers and sellers or, in the case of a crash, will be finally lost in the hands of the final holder.
If you buy a bitcoin for £1 and sell it for £30k - person B now owns the bitcoin and has invested £29,999 into the market (although £30k of his own money). He then sells it for £50k - person C now owns the bitcoin and has invested £49,999 into the market (person B got his £30k back so there is now £49,999 inserted into the market on that one bitcoin). If person D sells it for a loss at £30k there is now £29,999 in the market because the other £20,000 loss has been borne by person C). If the market collapses person D loses £30k which is the amount in the market plus the original £1. Buying/selling in a market is simply shuffling loss until the music stops. If the music never stops the potential losses are constantly in the market and provide the opportunity for trade.
So what you are saying is the guy that sold bitcoin has now got my 20k Am I reading that correctly and the guy that sold it created the drop in the purchase and sale price of the coin.