Nikolas Sargeant
The Bitcoin saga has been a nail-biting journey for investors since its inception. From humble beginnings worth mere cents to soaring heights of tens of thousands per coin, the cryptocurrency's path has been anything but stable. While some have amassed fortunes, others have seen their investments vanish in the blink of an eye.
Even after more than a decade in the spotlight, Bitcoin continues to be defined by its extreme volatility. Let's explore the most significant downturns in Bitcoin's tumultuous history of booms and busts.
Bitcoin's Major Crashes: A Chronological Overview
Throughout its history, Bitcoin has experienced several significant price plunges. While many corrections of 20%, 30%, and 40% have occurred, the following represent the most severe crashes in Bitcoin's volatile history:
June 2011: The -99% Crash
- Cause: Mt. Gox hack
- Details: Bitcoin soared from $2 to over $32, reaching parity with silver. On June 19, Mt. Gox, the world's largest Bitcoin exchange, revealed a major hack affecting hundreds of accounts.
- Impact: Bitcoin's value plummeted to just one penny in a single day.
August 2012: The -56% Crash
- Cause: Ponzi scheme uncovered
- Details: A digital-age Ponzi scheme promising 7% weekly interest was exposed.
- Impact: The scam resulted in the theft of 700,000 Bitcoins.
April 2013: The -83% Crash
- Cause: Mt. Gox trading volume overload and subsequent hack
- Details: Intense trading overwhelmed Mt. Gox's systems, leading to a crash that hackers exploited.
- Impact: Prices fell from nearly $260 to $50 as Mt. Gox was forced to shut down completely.
December 2013: The -50% Crash
- Cause: China's Bitcoin ban
- Details: China implemented its first major cryptocurrency restrictions.
- Impact: Bitcoin lost half its value overnight.
December 2017-December 2018: The -84% Crash
- Causes: Profit-taking, major hacks, and regulatory concerns
- Details: Following a peak near $20,000, investors cashed out. Major hacks in Korea and Japan, along with potential ban rumors, further spooked the market.
- Impact: Bitcoin's price fell below $12,000 and remained depressed throughout 2018.
March 2020: The -50% Crash
- Cause: COVID-19 pandemic market crash
- Details: Global market panic affected cryptocurrencies even more severely than traditional markets.
- Impact: Bitcoin's value halved in two days, falling from above $10,000 in February to below $4,000 in March.
May 2021: The -53% Crash
- Causes: Multiple factors including Elon Musk's Tesla announcement, China's crackdown, and environmental concerns
- Details: Tesla reversed its decision to accept Bitcoin, China announced new restrictions, and Bitcoin's energy consumption came under scrutiny.
- Impact: $1 trillion in value was erased from the global crypto market in a week.
May 2022: The -24.3% Crash
- Causes: Terra/LUNA collapse
- Details: The crash of Terra's algorithmic stablecoin (UST) and its sister cryptocurrency (LUNA) had a ripple effect.
- Impact: Bitcoin's value dropped from $38,472 to $29,101 between May 2 and May 24.
March 2024: The -16.5% Crash
- Causes: Ethereum's Dencun upgrade and ETF speculation
- Details: Ethereum's upgrade negatively impacted market dynamics, and hopes for an Ether spot ETF by May 2023 diminished.
- Impact: Bitcoin fell from its all-time high of $73,750 on March 14 to $61,538 on March 20.
This chronology highlights Bitcoin's persistent volatility and its susceptibility to various internal and external factors, from technological vulnerabilities to regulatory changes and market sentiment.
The Latest Price Plunge
Bitcoin has plunged over 18% to $50,000 in 24 hours, hitting its lowest since February 2024, likely due to a rising Japanese yen and U.S. bond market turbulence amid global market risk aversion.
