Author: Canghai Yixiao; Source: Bitcoin
As a highly volatile asset, Bitcoin has experienced sharp declines many times in history. These events are usually triggered by market sentiment, policy changes, technical factors or external shocks. The following are the major crash events in its history and related analysis:
Background: In 2013, Bitcoin broke through the $1,000 mark for the first time, reaching a high of $1,147.25. Subsequently, due to security issues on the Mt.Gox exchange and regulatory pressure, the price plummeted to $309.87 in 2014, a drop of more than 70%.
Impact: This plunge exposed the fragility of the cryptocurrency market, especially the exchange risk.
Process: After hitting a record high of nearly $20,000 in December 2017, Bitcoin entered a bear market, falling to a minimum of $3,122.28 in 2018, a drop of 84%.
Reason: The main reasons were the overheated market, the bursting of the ICO bubble and the strengthening of supervision in many countries.
Event: The COVID-19 pandemic triggered panic in global financial markets, and Bitcoin plummeted from about $9,000 to $3,850 in 24 hours, a drop of more than 50%.
Specificity: The plunge coincided with the macroeconomic crisis, highlighting Bitcoin's attributes as a "risk asset."
The first (May 2021): China issued a ban on cryptocurrency mining, and Bitcoin fell from $64,000 to $30,000, a drop of more than 50%.
The second time (July 2021): As market expectations for the Fed's rate hike increased, Bitcoin fell again from $40,000 to $29,000, a short-term drop of 27%.
Follow-up: Despite the two plunges, Bitcoin rebounded to a new high of $69,000 in November of the same year, showing its resilience in high volatility.
Background: In 2022, the Fed's aggressive rate hikes, coupled with the collapse of the LUNA/UST algorithmic stablecoin, caused Bitcoin to fall from $48,000 to $16,300, a drop of 66%.
Recent events: On February 3, 2025, Bitcoin fell 6.83% in a single day, hitting a low of $91,130. Mainstream currencies such as Ethereum fell by more than 20%. Within 24 hours, 720,000 people were liquidated, with a loss of $2.21 billion.
Causes: Geopolitical tensions (such as the US tariff policy) and a sharp drop in technology stocks (such as the evaporation of Nvidia's market value) triggered a wave of selling of risky assets.
1. Cyclic characteristics: Bitcoin bull market is often accompanied by a drop of more than 80%, and the bear market cycle usually lasts 1-2 years.
2. Sensitivity to external shocks: Policy changes (such as supervision, interest rate hikes), technical loopholes (such as exchange risks) and black swan events (such as epidemics) are the main triggering factors.
3. Short-term fluctuations and long-term trends: Despite frequent plunges, Bitcoin still shows an upward trend in the long run, but investors need to be wary of leverage risks (such as the 2025 liquidation incident).
For more detailed historical data or the latest market conditions, please refer to relevant financial platforms or cryptocurrency analysis reports.
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