Bitcoin (BTC) was launched in 2009, becoming the first cryptocurrency ever. Since the early years, the stories of fortunes made by investing in Bitcoin have been part of the crypto world’s allure. However, reports about fortunes lost overnight because of Bitcoin crashes are seldom told.
After more than a decade of existence, Bitcoin’s price still suffers from a lot of volatility. Although the bear market of 2022 caused a massive depreciation of this digital asset, it is far from the only Bitcoin crash in history. In this article, we recount seven of the worst Bitcoin crashes.
Bitcoin Flash Crash in 2011
2011 looked like a promising year for Bitcoin. This cryptocurrency crossed for the first time the psychological mark of $1 in late April. The first-ever Bitcoin rally took place in the following months, taking this asset’s price to $32 on June 8, 2011. But this joy was not long-lived. On June 19, the now-defunct Mt. Gox, a Japanese exchange trading most of the Bitcoin at the time, admitted that hackers had stolen 850,000 BTC from hundreds of accounts on its platform. This event raised concerns about the security of Bitcoin stored on exchanges. As a result, the BTC price plummeted to $0.01 in a single day. Luckily, it was a flash crash only.
The price loss was -99.9%
Bitcoin Crash in 2013
In 2013, Bitcoin was already a successful cryptocurrency. It was an effective payment method, and many enthusiasts considered it a highly profitable investment opportunity. In April that year, Bitcoin trading was quite intense on Mt. Gox to the point that the exchange’s servers could not handle such a high transaction volume. When the platform crashed, hackers took advantage of the vulnerability and attacked. For the first time, Mt. Gox went into a total shutdown, sending the BTC price from around $260 to $50.
The price loss was -83%
Bitcoin Price Drop in 2015
According to CoinMarketCap, the BTC price exceeded $1,000 in late November 2013. However, after hitting $1,077.6 on December 3, 2013, this cryptocurrency entered a bear market. Bitcoin traded at around $519 on December 18. This price drop resulted from the ban on Bitcoin by the Chinese central bank. Although Bitcoin lost 50% of its value in a few days, the downtrend continued throughout 2014, ending with a low of $170 in mid-January 2015.
The price loss was -84%
Why Bitcoin Crashed in 2017
Bitcoin performed very well in 2017. In December of that year, this cryptocurrency traded at nearly $20,000. But on December 27, the BTC price dropped below $12,000. This downtrend continued into 2018. Bitcoin lost more than 60% of its value in just two months. It ultimately hit $3,200 in December 2018. Why did it happen? Bitcoin was a victim of its own success. As this cryptocurrency hit a new all-time high, investors rushed to harvest their gains from what was clearly a bubble.
The price loss was -83%
Bitcoin Crash in 2020
2020 will go down in history as one of the most chaotic years in modern times. A global lockdown due to the Covid-19 pandemic crashed the international markets in March of that year. The Bitcoin market crashed very hard too. The BTC price went from over $10,000 in February to less than $4,000 in March.
The price loss was -60%
Bitcoin Crash in 2021
Many cryptocurrencies exhibited excellent price performance in 2021. Bitcoin was not the exception. In April of that year, Bitcoin hit an astonishing price of $63,000. This cryptocurrency’s market cap exceeded $1 trillion for the first time. But within the next three months, the BTC price plummeted to slightly over $29,000. This crash resulted from growing concerns about the harmful environmental impact of Bitcoin mining. Elon Musk dropped Bitcoin as payment for Tesla cars in May of that year. To add insult to injury, China announced yet another cryptocurrency crackdown, targeting local mining farms.
The price loss was -53%
Bitcoin Crash in 2022
After the crash of April-July 2021, the BTC price rebounded and set its current all-time high of $68,789.63 on November 10 that year. This digital asset failed to break the $70,000 line and started losing value toward the end of 2021. This price drop was one of the most prominent Bitcoin crashes ever.
By June 2022, Bitcoin traded at less than $20,000, fueling extreme fear in the market. Investors rushed to sell their Bitcoin holdings, making things worse. On November 9, the BTC bottomed at $15,883.16. Then, the price stabilized. As of January 25, 2023, Bitcoin trades at around $22,683.4, showing signs of recovery.
The crisis of algorithmic stablecoins caused the most recent Bitcoin crash, most specifically, the deppeging of the TerraUSD Classic (USTC) stablecoin. Although many investors are optimistic, it is unknown whether the BTC price will return to its previous $68,000 level and when it might happen.
The price loss was -78%
Conclusion
The above survey shows that Bitcoin has experienced several disastrous price crashes. Yet, Bitcoin is still considered one of the safest investments in the crypto market. This cryptocurrency has demonstrated its ability to recover from all price crashes, rebound, and reach new highs. That’s why many investors are confident Bitcoin will set a new price high in the coming years or even months despite the recent market crash of 2022.
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FAQ
Is Bitcoin likely to crash again?
Like most cryptocurrencies, Bitcoin suffers from high price volatility since various factors influence its market value. Hence, the Bitcoin price could crash again in the future.
Why is Bitcoin crashing?
There have been various reasons for Bitcoin crashes throughout its history. The most recent Bitcoin crash of 2022 is primarily attributed to the crisis of algorithmic stablecoins, particularly the depegging of USTC.
Why did Bitcoin crash suddenly?
The Bitcoin price usually crashes suddenly when investors massively withdraw their BTC holdings in response to an unforeseen event, such as a hacking attack.
How many bitcoin crashes have there been?
We reviewed the seven most notable Bitcoin crashes in history. There have been other price drops that some consider minor Bitcoin crashes.
Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.
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