Bitcoin is the first coin to use blockchain, laying the foundation for the entire cryptocurrency market. Within 10 years of formation and development, Bitcoin (BTC) has experienced many ups and downs to become the asset that surpasses the most breakout price levels to date.
Let’s find out the worst crashes of Bitcoin (BTC) through this article with Crypto Insights!
What is Bitcoin?
Bitcoin (also known as BTC) is a cryptocurrency issued as an open-source blockchain. Bitcoin allows anyone to access, use, and transact peer-to-peer, not subject to 3rd party control and almost zero transaction fees.
The value of Bitcoin lies in blockchain technology and distributed ledgers, not in the price increase as many people mistakenly believe. Because any asset in the financial market in general and the crypto market, in particular, will have a specific up and down cycle (there are 4 years, and there are up to 10, 20 years to increase and decrease). In addition, the increase and decrease in prices also partly reflect the law of supply and demand and show market sentiment.
Deepest Bitcoin (BTC) Crash Ever
June 2011 (99%)
Bitcoin had its first bull run in early 2011 (price increased from $2 to $32). This is considered to be one of the strongest Bitcoin bulls to date.
![Bitcoin implodes, falls more than 90 percent from June 2011](https://cdn.arstechnica.net/wp-content/uploads/2011/10/bitcoin_implodes-4e9da25-intro.png)
However, this strong price increase has brought many risks. On June 19, Mt.Gox (the largest Bitcoin exchange at that time) announced that hundreds and thousands of accounts had been hacked, causing the exchange to suddenly stop all trading orders, freezing more than a dozen million dollars.
This “hack” caused more than 25,000 BTC to evaporate, causing the price of Bitcoin to plummet from 16 USD to 2 USD at that time. This is the first hack of the exchange, about a month and a half later, there were 4 more hacks in a row and a total loss of nearly 180,000 BTC. However, a series of investors could not resist the allure of BTC and ignored a series of bad news, still deciding to invest.
August 2012 (56.3%)
The second BTC halving involves a Ponzi scheme called Bitcoin Savings & Trust. The event overview is as follows:
– In August 2012, the Bitcoin Savings & Trust plan was launched with the promise of attractive returns of up to 7%/week.
– The plan collapsed when Trendon Shavers (Founder of this Ponzi project) announced that the interest rate would drop to 3.9 %/week.
– It is estimated that this project has scammed more than 700 thousand BTC. Shavers received 18 months in prison and 40 years of probation, among other penalties.
– Bitcoin price dropped from 13.5 USD to 8 USD (August 19, 2012).
April 2013 (82.6%)
![How Bitcoin can be hacked? | ItsBlockchain](https://itsblockchain.com/wp-content/uploads/2020/04/bitcoin-hack.png)
In 2013, BTC attracted strong attention from the community, investors poured money to find opportunities to “get rich”. At that time, Mt.Gox was still the most popular exchange, so all Bitcoin transactions flowed here. At its peak in 2013, the exchange had to process more than 70% of all Bitcoin transactions worldwide.
Demand increased but supply did not increase, because the transaction volume was too large, Mt.Gox leaked a security hole and became a “delicious bait” for hackers. This event caused the price of BTC to plummet from $259 to $50 (82.6%).
January 2016 (86%)
The overview of the event “increase – decrease – increase – decrease “shock” the Bitcoin price of the 4th phase is encapsulated as follows:
- Bitcoin sideways around the $120-130 mark from April 2013, to November 30, 2013, suddenly crossed the $1,000 mark (up 7,700%) -> many people think that BTC is a crypto bubble due to the “evolving out of control”.
- FOMO/FUD syndrome appeared, and many investors rushed to buy Bitcoin -> The price plummeted by nearly 50% to $ 400 because of the imbalance of supply and demand and recovered to $ 1,000 in January 2014.
- On 07/02/2014, Mt.Gox exchange once again hacked -> beyond the control of the floor team -> the company went bankrupt at the end of February 2014.
- In April 2014, CEO of Mt.Gox – Mark Karpeles was accused of illegally manipulating user accounts by providing “fake” data -> The company was put into bankruptcy and forced to pay damages. harmful to the user.
- Losses amounted to 850,000 BTC including 750,000 BTC deposited on the exchange and 100,000 BTC of company assets (estimated $423 million); accounted for about 7% of the total amount of BTC on the market -> BTC price dropped shockingly during the day to 152 USD (January 14, 2015).
After nearly 2 years since April 2013, the Mt.Gox exchange was once again the cause of the strong price collapse of Bitcoin (BTC). Therefore, today’s exchanges always have to put security first, because just one big enough hack of top coin assets (BTC, ETH, …) will be able to affect the market.
December 2018 (83%)
The summary of the 5th Bitcoin over 80% price drop event is as follows:
On December 17, 2017, BTC reached a new ATH of nearly $20,000 (up nearly 40%). The rapid increase in price resonated with the continuous FOMO and FUD market, causing BTC to drop without breaking below 12 thousand USD.
By the end of 2018, Bitcoin is down more than 50% from the aforementioned ATH.
The market at that time appeared quite a lot of big hacks in Korea, China and Japan, so there were rumors that these countries banned Bitcoin -> Many investors found a way out and simultaneously “discharged” -> Bitcoin gradually fell to the bottom of $3,220 (December 15, 2018).
March 2020 (60%)
Crypto is a new, potential and risky market. Although decentralized, objective factors (political, social…) will be able to affect the entire market. In mid-January 2020, the context of the Corona pandemic caused many markets such as stocks, forex, and crypto to begin to plunge.
Crypto alone, after 3 years of hard work, fell without stopping because of the pressure of the economy that day, BTC price bottomed at $3,760 (the lowest level in 2020). Many investors panicked and fled, leaving a red color covering the market. That period is known as the black swan and is etched into the history of Bitcoin.
May 2021 (53%)
Bitcoin has come under pressure following a series of tweets by billionaire Elon Musk, mostly a reversal of his stance on Tesla stopping accepting Bitcoin payments.
In addition, China has also strongly banned financial institutions and payment companies from providing crypto-related services as part of its unremitting efforts to prevent risk and speculation. finance.
The Financial Stability and Development Commission of the State Council of China has pointed out that Bitcoin is an asset that needs more regulation. The report of the meeting emphasized “BTC needs to be vigilant and look for potential risks”, “impose regulations on a variety of Bitcoin mining and trading activities and prevent personal risks from spreading to society.”.
The statement comes days after three Chinese regulators warned domestic financial institutions against trading cryptocurrencies.
November 2022 – Now (75%)
The crypto-stock market crash in 2022 is believed to be linked to increased interest rate tightening measures.
The US and many countries around the world have been facing record-high inflation. Accordingly, the cause is the printing of money since the COVID-19 wave to stimulate demand (increase the money supply) and supply chain disruptions (decrease the output of goods) to push up prices.
To combat inflation, the US Federal Reserve and many other central banks have had to raise interest rates to reduce the amount of money circulating in the economy.
One of the reasons why the crypto market crashed is said to be related to the collapse of the Terra ecosystem. The 40 billion USD flying in color in just a few days created a strong liquidation wave, affecting the whole market.
Bitcoin has seen its price trade below previous highs for more than three years. The previous peak of $68,000 took place just seven months ago, and it’s yet to be seen whether and when Bitcoin would return to new heights.