Many people are skeptical about Bitcoin and somehow still believe that a ~trillion dollar asset will become worthless. Well for those who are not familiar with the history of bitcoin, there was a period of time where there was a legitimate chance that the price of the this infamous asset would actually go to zero. Here is a brief history of Mt. Gox and how significant this event was.
Mt. Gox was one of the first Bitcoin exchanges on the internet. Not only were they one of the first crypto exchanges, but they also contributed to 70% of the bitcoin volume. Considering that in these days, the total Market cap was sub 1 billion, even at times sub 1 million, this exchange had a Huge effect on the bitcoin price. The thing about Mt. Gox was that although it was the most popular bitcoin exchange, it had countless security issues. In the early years of the company trading bitcoin, someone was able to hack the computers on the Mt. Gox network and change the bitcoin price from around $17 down to $0.01. After this change in price, the hacker used the exploit to buy a bunch of bitcoin and scam many out of their holdings. Although the Mt Gox administrators were able to reduce some of the damage the hacker caused, the hacker still was able to make off with around 2,000 bitcoins. But this was only the beginning of troubles for Mt. Gox. A few years later, bitcoin was hitting it's all time high of $1,000 and for the first time ever, it was getting attention from the main stream news. With bitcoin lovers going crazy about how they were right, there was a bigger issue at play. Many of these investors kept their bitcoin on the famous exchange Mt. Gox, and for some reason, they were limiting the amount of bitcoin that could be withdrew from accounts. With growing concerns, bitcoin price started to drop fast. It went from 1k on Jan 1 2014, down to under $120 on February 24. Then on Feb. 25, Mt Gox went down and no one was able to get on. To put this in perspective, bitcoin went from a $12 Billion asset to a $1B asset in weeks. If there would be a time for bitcoin to go to zero, this would have been it. Not only was Mt. Gox down during this time, but just months before the Silk road got shut down which resulted in the government seizing 175k bitcoins, and to make matters worse Homeland security started penalizing Mt. Gox for breaking money transmitting laws, making many worried about government regulation. When Mt. Gox went back online it was discovered the site was hacked and lost around 850,000 bitcoin, around 7% of the total supply of bitcoin at the time.
Fast forward 7 years and bitcoin is approaching a 1 trillion dollar market cap, is held on the balance sheet of multibillion dollar tech companies, being traded on wall street, and is talked about on every financial TV show and podcast there is. If bitcoin was going to die, it would've died when it was worth $1B. Billion dollar assets die all the time, just look at Quibi. But when is the last time you heard of a $1T asset going to zero? Bitcoin has withheld test and trials that no other asset has ever had to go through and its still thriving. Those who say bitcoin has not withheld the test of time has not looked deeply enough into the history of bitcoin. Bitcoin has went through more tribulations in its 12 years of existence than other assets have went through in the last hundred years. Bitcoin has shown time and time again that it can not be killed and those who think otherwise are ignorant.
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