Bitcoin has successfully held the status of the world’s leading cryptocurrency over the past decade. At the beginning of 2011, BTC wasn’t even taken seriously, whereas in 2022, this cryptocurrency stores billions of dollars from the largest institutional investors. Bitcoin has already seen both rapid ups and dramatic downs throughout its existence. Let’s break down five of the biggest crashes of the first cryptocurrency in its history.
Mt.Gox Hack: June 19, 2011
Bitcoin’s first crash was by far one of the most tangible. In early 2011, the cryptocurrency’s price rose to $1 for the first time, and by mid-2011, it was up to $32. Mt.Gox was the largest marketplace for BTC transactions at that time. According to Bitcoincharts, as of August 2013, up to 47% of transactions in the Bitcoin network were processed through Mt.Gox.
Mt.Gox was hacked on June 19, 2011, resulting in a several-minute drop to one cent. The attackers exploited a software vulnerability and appropriated about 2,600 BTC, selling them to themselves for mere cents. According to various sources, the damage amounted to approximately $8.7 million. Since the incident, BTC plunged to $17, which is more than 50% less than it was before.
The security system was fixed a few minutes later, but the breaches were not eliminated. As a result, by the end of February 2014, the hackers managed to withdraw from 650,000 to 850,000 BTC through double-spending, as it became known due to a leak of internal information. This was equivalent to about $450 million at the time and contributed to the next big drop, among other things.
Chinese Veto: December 2013
In 2013, the first cryptocurrency’s price fell and then showed impressive figures. The periods of change in its price were the following:
- From January to April — from $13 to $230;
- Late April — the price fell to $68;
- From May to November — the price returned to $200.
In December 2013, Bitcoin managed to break previous records. During that period, each coin was registered at more than $1.151. However, due to China’s harsh policy, which banned any transactions with BTC overnight, the price more than halved.
Bitcoin was in a highly volatile zone for a significant part of 2014. In January 2015, BTC dropped below $200. Only two years later, Bitcoin reached the $1,000 mark again.
The Great Crypto Crash: December 2017 — 2018
Late 2017 saw Bitcoin hit a new all-time high. The price per coin reached $19,497. Back then, crypto exchanges in South Korea began banning new accounts as the hype around Bitcoin reached fever pitch. By the end of 2017, BTC dropped to $13,000, a fall of 30%!
In February 2018, the value of BTC continued to fall below $6,000. For the next nine months, Bitcoin fluctuated between $6,000 and $10,000. December 2018 saw its price hit a low of $3,300, almost as if Bitcoin were aiming to reach its bottom.
We should note that this happened amid the fall of BTC when the crypto community started actively talking about Ethereum, which finally secured its second place around that time and established itself as the largest altcoin.
The Pandemic: March 2020
The COVID-19 pandemic that broke out in 2020 couldn’t help but affect the price of Bitcoin. Intervening factors that significantly impacted the major cryptocurrency, such as:
- lockdowns around the world and the economic downturn;
- panic sentiments among the general public;
- stock market crash, etc.
During the first half of 2020, short-term investors sold off most of their crypto assets. BTC went from $9,000 to less than $4,800 in just a few days in March 2020. By the end of the year, the cryptocurrency market still had a chance to gradually recover. The key factors were the quantitative easing policy and the industry’s growing interest.
In the first half of 2021, major companies such as MicroStrategy and Tesla actively invested in Bitcoin. According to CoinMarketCup, as of April 13, 2021, the price of 1 BTC was $63,503. The first cryptocurrency broke records again.
The Rebound: May 2021
Another price collapse came in May 2021. The fall in BTC’s value proved to be quite noticeable. As of May 22, 2021, Bitcoin fell below $35,000, a two-week decline exceeding 35%. Besides, the crypto market’s total capitalization decreased by more than a third, down to $1.58 trillion. Among the primary reasons for the May fall are China’s ban on cryptocurrencies and Tesla’s refusal of Bitcoin due to the first cryptocurrency’s ecological impact.
The fall lasted for several months. The local low was reached in July when the price fell below $30,000. And in November 2021, Bitcoin set a new local high above $69,000. The end of 2021 recorded $46,000 per 1 BTC.
Market Current State
As of April 21, 2022, the price per Bitcoin is approximately $41,600. The fluctuations in recent months reached 30%, clearly illustrating the high volatility and confirming the characteristic of “a high-risk asset.”
However, the crypto market has shown stability over the past few years. Hacks of cryptocurrency exchanges, as was the case with Mt.Gox, seem unlikely since security methods have greatly improved. And Bitcoin has already proven that it can recover even after severe drops in price. That’s why long-term holders continue to accumulate BTC in their accounts, ignoring such “hiccups” as price drops of a couple of thousand dollars within an hour and “crypto winter” predictions.
