Bitcoin Major Crash Event
From 2011 to now, Bitcoin has experienced multiple sharp rises and falls. The following are the reasons, processes, and impacts of each major decline, suitable for newcomers to understand the entire market history.
Event Timeline
Trump's New Policy Raises Concerns + Capital Flight, Crash from $108,000 to $78,000 (-27%)
Trump proposed new tariff policies, causing global market instability. Plus, the funds in ETF began to realize profits and exit, triggering a sharp decline.
Grayscale Large Fund Redemption, Crash from $71,000 to $56,000 (-21%)
Grayscale fund (Grayscale) opened redemption, many institutions converted BTC to cash and exited the market, causing a sharp decline in the short-term price.
SEC Tweet Hacked, Unexpected Crash from $47,900 to $41,500 (-13%)
The official X account of SEC was hacked, and a fake 'ETF approval' message was posted. The market first rose and then crashed, with many people directly liquidating their positions after buying at a high price.
FTX Exchange Crash Triggers Trust Crisis, Crash from $21,000 to $15,500 (-26%)
The second largest cryptocurrency exchange, FTX, collapsed suddenly, leaving all user funds frozen. Investors worried about the safety of other platforms, so they withdrew from the market, causing a sharp decline in Bitcoin.
Terra UST Stablecoin Crash, Crash from $40,000 to $26,000 (-35%)
The stablecoin UST of Terra project broke its peg, and its supporting LUNA also collapsed. This was the largest stablecoin disaster in the history of the crypto world, and Bitcoin and other currencies were also affected.
Musk's Environmental Speech + Chinese Mining Ban, Crash from $64,000 to $30,000 (-53%)
Musk suddenly said Bitcoin 'uses too much electricity', no longer supporting the use of BTC to buy Tesla. Subsequently, China banned mining, and the double blow led to a halving of the price.
Global Sell-off Caused by COVID-19 Outbreak, Crash from $10,000 to $4,000 (-60%)
In the early stages of the pandemic, people were rushing to convert cash for self-rescue, even selling Bitcoin. That day, the market experienced a sharp decline, with some calling it '312 Massacre'.
ICO Bubble Bursts, Winter from $19,800 to $3,200 (-84%)
In 2017, many projects raised funds through 'ICO' (Initial Coin Offering) to attract a lot of speculation. Later, governments in the US and other countries began to crack down on these projects, many air coins went to zero, and Bitcoin was also dragged down.
Bear Market Drag + Regulatory Pressure Accumulation, Crash from $1,000 to $170 (-83%)
After Mt. Gox incident, market confidence did not recover, and global regulation also restricted Bitcoin-related business. People stopped buying, and the price fell to the bottom.
Mt. Gox Bankruptcy Announced Missing 850,000 BTC, Crash from $1,000 to $360 (-64%)
'Mt. Gox' exchange again went bankrupt, claiming it 'couldn't find' 850,000 user bitcoins before announcing bankruptcy. This severely damaged the trust of everyone in Bitcoin trading platforms.
China Bans Bitcoin Trading Services, Crash from $1,147 to $600 (-48%)
The Chinese central bank issued a circular prohibiting banks and payment platforms from participating in Bitcoin business, which was a significant blow to many Chinese users. Many people worried that Bitcoin could no longer be used, so they sold, causing a sharp decline in price.
Mt. Gox Faulty + Hacker Interference, Crash from $260 to $50 (-81%)
Bitcoin's sharp rise attracted many new users, leading to a surge in trading volume on Mt. Gox, resulting in system failure unable to place orders. The hacker also took advantage of the situation to launch attacks, causing the price to plummet.
Ponzi Scheme Exposed, Market Panic from $16 to $7 (-56%)
A person named Bitcoin Savings & Trust set up a 'high interest savings' Ponzi scheme, many people deposited Bitcoin but couldn't get it back. After the scheme was exposed, people began to panic and sell, causing the price to halve.
Mt. Gox Hacked, Crash from $32 to $0.01 (-99.9%)
Mt. Gox (also known as 'Mt. Gox'), as the largest Bitcoin exchange at the time, was hacked. The hacker controlled accounts were selling Bitcoin at a low price on the market, causing a large loss for novice users.