From the very beginning, the story of Bitcoin has been one of white-knuckled investors holding on for dear life as they rode the digital currency from a few pennies in value to tens of thousands of dollars per token. Fortunes have been made, indeed, but they’ve also been lost — often overnight or close to it. More than a decade after it emerged from the shadows of the internet, Bitcoin has still not gotten past its tendency for stratospheric highs and subterranean lows. Here’s a look at the biggest crashes in the bubble-bust-repeat history of Bitcoin.
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Why the Decade-Long Roller Coaster Ride?
When Bitcoin first gained mainstream traction, people put money down based mostly on a feeling, not on a true understanding of things like blockchain technology. Their optimism about getting in on the ground floor of a potentially seismic game-changer fueled super-inflated bubbles as no one wanted to be left out once the bandwagon started rolling.
Each and every time, brutal reality checks popped those bubbles. The emerging technology fell victim to criminal hacks, exchange shutdowns, scams and Ponzi schemes, and inconsistent and often arbitrary government regulations. Each and every time, flocks of investors who were already nervous about such an unknown quantity fled for safer, more familiar pastures.
A Look at Bitcoin’s Lowest Lows
The following is a chronology of the worst percentage-based crashes in Bitcoin history. Keep in mind that many major corrections of 20%, 30%, 40% and more didn’t make the list.
June 2011: -99%
In 2011, Bitcoin hit the big time when it soared from $2 to more than $32, achieving parity with an ounce of silver. Then the bottom fell out. On June 19, Mt. Gox — the largest Bitcoin exchange in the world by far — admitted that criminals had hacked hundreds of accounts and stole millions of dollars worth of Bitcoins. In a single day, the value of a Bitcoin fell to one penny.
August 2012: -56%
In August 2012, the public learned that a classic Ponzi scheme updated for the digital age had been bilking crypto investors for months. Promising incredible returns of 7% weekly interest, the culprit — later charged, convicted, fined and imprisoned — had stolen 700,000 Bitcoins by deception.
April 2013: -83%
In April 2013, Bitcoin became a victim of its own success as investors piled on to the exciting new opportunity that was buzzing in the mainstream media. Trading was so intense that Mt. Gox couldn’t handle the volume, and when it crashed, hackers attacked the vulnerability. It forced Mt. Gox into an unprecedented total shutdown, sending prices from nearly $260 to $50.
December 2013: -50%
When China banned Bitcoin at the end of 2013, it lost 50% of its value overnight, according to the Guardian. China’s relationship with cryptocurrency remains turbulent and the country continues to add new restrictions today.
December 2017-December 2018: -84%
2017 was a landmark year for Bitcoin, which broke all its own records and peaked near $20,000. Then, on Dec. 27, it all came crashing down as investors harvested gains from what was an obvious bubble and sent the price cratering below $12,000. The cryptocurrency would remain in the doldrums throughout 2018, as major hacks in Korea and Japan — as well as rumors that those countries were planning to ban Bitcoin — sent already skittish investors looking for the exits.
March 2020: -50%
The pandemic did not spare Bitcoin, and when the markets crashed in March 2020, the Bitcoin market crashed even harder. Bitcoin lost half its value in two days. Over a month, it fell from above $10,000 in February to below $4,000 in March.
May 2021: -53%
In April, Bitcoin was the talk of the investing world as it roared past an astonishing $64,000 for a single coin. Then, in a flash, $1 trillion in value was wiped off the global crypto market in a single week. First, Elon Musk went back on a promise to accept Bitcoin as a payment for Tesla cars. Then, China announced yet another crypto crackdown. Finally, the public learned about the environmental impact of Bitcoin mining and crypto investors found themselves in a familiar position — at the mercy of forces beyond their control.
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Last updated: June 30, 2021